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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Georgica Plc | LSE:GGA | London | Ordinary Share | GB0009769414 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 14.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMGGA
RNS Number : 5775O
Georgica PLC
10 March 2009
Georgica PLC
Preliminary results for the 52 week period ended 28th December 2008
Chairman's statement
Economic conditions deteriorated throughout 2008 and Georgica did not manage to
"buck the trend".
Sales for 2008 amounted to GBP62.8m, a decline of GBP2.9m when compared with
2007. Same outlet sales for the 52 week period were 3.3% lower. Sales were
particularly disappointing during the second half of the year, especially in
November and December.
During the year earnings before interest, tax, depreciation and amortisation
(EBITDA) for the operating businesses amounted to GBP6.6m (2007: GBP10.7m).
GBP1.8m of this decrease was occasioned by the sale and lease back of freehold
and long leasehold properties for GBP46m cash during 2007 and 2008. EBITDA for
the group amounted to GBP5.1m (2007: GBP9.1m from continuing operations).
The loss before tax for the year amounted to GBP44.5m (2007: profit before tax
of GBP7.2m from continuing operations). This loss occurred primarily because the
carrying values of Georgica's trading units and properties held for
redevelopment have been lowered by a total of GBP46.4m, following a review of
impairment and onerous leases and property valuations, and now more closely
reflect current market values. However, before this non-cash writedown, Georgica
earned a profit of GBP1.9m (2007: GBP11.5m) before tax.
During 2007, Georgica reduced its net debt from a peak of GBP99.5m to GBP4.6m on
30th December 2007. Accordingly, interest in 2008 fell from GBP7.1m to GBP0.7m.
New 5 year banking facilities were established in April 2008. On 28th December
2008, Georgica had net debt of GBP4m compared with available debt facilities of
GBP15m. As at 28th February 2009, net debt amounted to GBP0.9m. Georgica
continues to own 6 properties for sale or redevelopment, two of which have
already received planning consent.
No satisfactory offer has as yet been received for Georgica. Accordingly and in
line with previous announcements, your board has decided to put proposals
forward to restructure the group in order that excess cash may be returned to
shareholders. More details of the proposed corporate restructuring are contained
within the scheme circular and AIM admission documents which are expected to be
posted with the accounts. The proposals will involve the creation of a new group
holding company, to be called Essenden PLC.
Today Georgica is a much simpler business than at the time that it acquired
Allied Leisure. The proposed restructuring to return cash to shareholders is an
appropriate time to refresh the board. I will retire from the board at the AGM
and Clive Preston and Bob Wickham will retire as directors at the same time.
Rory McNamara, who will become chairman of Essenden PLC, and Christopher Mills,
who will become a non-executive director, are both well experienced directors of
small listed companies. Christopher Mills inter alia manages North Atlantic
Value, Georgica's largest shareholder.
Given the economic circumstances, trading in the first 9 weeks of 2009 held up
quite well. Same outlet sales were approximately 3.8% lower than in the same
period last year. However EBITDA has increased when compared with the same
period last year.
Tenpin is the leading tenpin bowling operator in the UK with 38 bowls (two of
which opened in the fourth quarter of 2008). It has a modern estate in good
condition. It leads the UK bowling industry in the development of online and
telephone sales systems. Substantial cost savings have recently been achieved.
Taking all factors into account, the board anticipate that, in 2009, Georgica
will deliver an adequate, if unexciting, result.
Don Hanson
9th March 2009
Unaudited segmental analysis for the 52 week period ended 28th December 2008
This analysis has been adjusted from the information shown in the consolidated
income statement with additional information to explain more clearly the results
of the group. The comparative information for the 52 week period ended 30th
December 2007 has been extracted from the 2007 annual report.
+---------------------------+----------+----------+---------+---------+----------+----------+
| | Tenpin | Georgica | Total |
| | | Overheads1 | |
+---------------------------+---------------------+-------------------+---------------------+
| | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 |
+---------------------------+----------+----------+---------+---------+----------+----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+---------------------------+----------+----------+---------+---------+----------+----------+
| Continuing operations: | | | | | | |
+---------------------------+----------+----------+---------+---------+----------+----------+
| Revenue | 62,814 | 65,681 | - | - | 62,814 | 65,681 |
+---------------------------+----------+----------+---------+---------+----------+----------+
| Cost of sales | (25,899) | (26,762) | - | - | (25,899) | (26,762) |
+---------------------------+----------+----------+---------+---------+----------+----------+
| Operating costs | (16,560) | (16,462) | - | - | (16,560) | (16,462) |
+---------------------------+----------+----------+---------+---------+----------+----------+
| Rent2 | (10,395) | (8,187) | 233 | 66 | (10,162) | (8,121) |
+---------------------------+----------+----------+---------+---------+----------+----------+
| Contribution | 9,960 | 14,270 | 233 | 66 | 10,193 | 14,336 |
+---------------------------+----------+----------+---------+---------+----------+----------+
| Overheads | (3,398) | (3,554) | (1,730) | (1,716) | (5,128) | (5,270) |
+---------------------------+----------+----------+---------+---------+----------+----------+
| EBITDA3 | 6,562 | 10,716 | (1,497) | (1,650) | 5,065 | 9,066 |
+---------------------------+----------+----------+---------+---------+----------+----------+
| Non recurring items and | | | | | | |
| net | | | | | | |
+---------------------------+----------+----------+---------+---------+----------+----------+
| movement on provisions4 | (4,839) | 24,844 | (303) | (3,358) | (5,142) | 21,486 |
+---------------------------+----------+----------+---------+---------+----------+----------+
| Depreciation and | | | | | | |
| impairment | | | | | | |
+---------------------------+----------+----------+---------+---------+----------+----------+
| - goodwill impairment5 | (26,772) | (1,837) | - | - | (26,772) | (1,837) |
+---------------------------+----------+----------+---------+---------+----------+----------+
| - software5 | (1,335) | (156) | - | - | (1,335) | (156) |
+---------------------------+----------+----------+---------+---------+----------+----------+
| - property5 | (8,360) | (962) | - | - | (8,360) | (962) |
+---------------------------+----------+----------+---------+---------+----------+----------+
| - fixtures, fittings & | (6,873) | (4,212) | - | - | (6,873) | (4,212) |
| equipment5 | | | | | | |
+---------------------------+----------+----------+---------+---------+----------+----------+
| - non-operating assets | (72) | (165) | (79) | (100) | (151) | (265) |
+---------------------------+----------+----------+---------+---------+----------+----------+
| Total depreciation and | (43,412) | (7,332) | (79) | (100) | (43,491) | (7,432) |
| impairment | | | | | | |
+---------------------------+----------+----------+---------+---------+----------+----------+
| Operating (loss)/ profit | (41,689) | 28,228 | (1,879) | (5,108) | (43,568) | 23,120 |
+---------------------------+----------+----------+---------+---------+----------+----------+
| Net interest | | | | | (719) | (7,158) |
+---------------------------+----------+----------+---------+---------+----------+----------+
| Financial instruments and | | | | | (212) | (8,801) |
| bank charges6 | | | | | | |
+---------------------------+----------+----------+---------+---------+----------+----------+
| (Loss)/ profit before tax | | | | | (44,499) | 7,161 |
+---------------------------+----------+----------+---------+---------+----------+----------+
| Tax | | | | | 5,377 | 1,392 |
+---------------------------+----------+----------+---------+---------+----------+----------+
| (Loss)/ profit after tax | | | | | (39,122) | 8,553 |
| from continuing | | | | | | |
| operations | | | | | | |
+---------------------------+----------+----------+---------+---------+----------+----------+
| Discontinued operations: | | | | | | |
+---------------------------+----------+----------+---------+---------+----------+----------+
| Loss before tax | | | | | - | (13,774) |
+---------------------------+----------+----------+---------+---------+----------+----------+
| Tax | | | | | - | (5,201) |
+---------------------------+----------+----------+---------+---------+----------+----------+
| Loss after tax from | | | | | - | (18,975) |
| discontinued operations | | | | | | |
+---------------------------+----------+----------+---------+---------+----------+----------+
| | | | | | | |
+---------------------------+----------+----------+---------+---------+----------+----------+
| Loss after tax for the | | | | | (39,122) | (10,422) |
| period | | | | | | |
+---------------------------+----------+----------+---------+---------+----------+----------+
¹ Georgica overheads include the (charge)/credit for movements in the
valuation of performance shares in the Georgica Executive Participation Plan,
which is volatile as it varies with the Georgica share price. The credit in 2008
was GBP0.02m (2007 - credit of GBP0.7m).
²Rent includes GBP2.7m (2007 - GBP0.9m) from ten sale and leaseback transactions
(one completed in Q2 2008 which raised sale proceeds of GBP3.25m and nine
completed in Q3 2007 which raised sale proceeds of GBP43.0m).
³ EBITDA represents earnings before interest, tax, depreciation, impairment,
non recurring items and net movement on provisions.
4The non recurring items and net movement on provisions in the 52 weeks ended
28th December 2008 in Tenpin comprises the profit on the sale and leaseback of
Stoke bowl of GBP2.2m, the profit on the sale of Cardiff bowl of GBP0.5m and the
loss on closure of bowls in Edinburgh and Gateshead of GBP0.6m, together with a
net charge of GBP6.7m from onerous lease provision movements and non recurring
costs of GBP0.2m associated with IT projects (2007 - comprises the profit of
GBP27.9m on sale and leaseback of nine bowls, the profit on sale of Plympton
bowl of GBP0.5m, a goodwill charge in respect of disposals of GBP2.1m, a net
increase to onerous lease provisions of GBP1.0m and non recurring costs
associated with outsourcing of sales office activities to a call centre of
GBP0.4m). In Georgica overheads it comprises the profit on disposal of
properties held for resale at Pontefract and Westcliff of GBP1.3m; a charge of
GBP0.4m arising from the revaluation of the 6 remaining properties now
classified as investment properties; legal and professional costs of GBP0.8m
associated with corporate transactions and costs of GBP0.4m associated with the
investment property programme (2007 - comprises GBP3.4m of costs associated with
corporate transactions).
5 In Tenpin, goodwill has been impaired by GBP26.8m in the 52 weeks ended 28th
December 2008, software has been impaired by GBP0.8m, property assets have been
impaired by GBP7.7m and fixtures, fittings & equipment have been impaired by
GBP3.8m.
6 Financial instruments and bank charges include the movement in the fair value
of financial instruments in each period, which fluctuate with interest rate
expectations. These were responsible for a benefit of GBP0.4m in the 52 weeks
ended 28th December 2008 (2007 - charge of GBP0.1m).
+--------------------------------------------+-------+---------------+---------------+
| Consolidated income statement for the 52 week period ended 28th December 2008 |
+------------------------------------------------------------------------------------+
| | | | |
+--------------------------------------------+-------+---------------+---------------+
| |Notes | 52 weeks to | 52 weeks to |
| | |28th December |30th December |
| | | 2008 | 2007 |
+--------------------------------------------+-------+---------------+---------------+
| | | | |
+--------------------------------------------+-------+---------------+---------------+
| | | GBP000 | GBP000 |
+--------------------------------------------+-------+---------------+---------------+
| Continuing operations: | | | |
+--------------------------------------------+-------+---------------+---------------+
| Revenue | 1 | 62,814 | 65,681 |
+--------------------------------------------+-------+---------------+---------------+
| Cost of sales | | (25,899) | (26,762) |
+--------------------------------------------+-------+---------------+---------------+
| Gross profit | | 36,915 | 38,919 |
+--------------------------------------------+-------+---------------+---------------+
| Administrative expenses: | | | |
+--------------------------------------------+-------+---------------+---------------+
| Profit on disposal | 2 | 3,412 | 26,260 |
+--------------------------------------------+-------+---------------+---------------+
| Impairment | 6 | (39,019) | (3,249) |
+--------------------------------------------+-------+---------------+---------------+
| Other administrative expenses | | (44,876) | (38,810) |
+--------------------------------------------+-------+---------------+---------------+
| Operating (loss)/ profit | | (43,568) | 23,120 |
+--------------------------------------------+-------+---------------+---------------+
| Interest payable and similar charges | 4 | (1,502) | (16,211) |
+--------------------------------------------+-------+---------------+---------------+
| Interest receivable | 5 | 571 | 252 |
+--------------------------------------------+-------+---------------+---------------+
| (Loss)/ profit before taxation | 6 | (44,499) | 7,161 |
+--------------------------------------------+-------+---------------+---------------+
| Taxation | 7 | 5,377 | 1,392 |
+--------------------------------------------+-------+---------------+---------------+
| (Loss)/ profit from continuing operations | | (39,122) | 8,553 |
+--------------------------------------------+-------+---------------+---------------+
| Discontinued operations: | | | |
+--------------------------------------------+-------+---------------+---------------+
| Net loss from discontinued operations | 8 | - | (18,975) |
+--------------------------------------------+-------+---------------+---------------+
| | | | |
+--------------------------------------------+-------+---------------+---------------+
| Loss for the period attributable to equity | | (39,122) | (10,422) |
| shareholders | | | |
+--------------------------------------------+-------+---------------+---------------+
| | | | |
+--------------------------------------------+-------+---------------+---------------+
| | | | |
+--------------------------------------------+-------+---------------+---------------+
| Earnings per share (continuing operations) | | | |
+--------------------------------------------+-------+---------------+---------------+
| Basic earnings per share | 22 | (38.1)p | 8.3p |
+--------------------------------------------+-------+---------------+---------------+
| Diluted earnings per share | 22 | (38.1)p | 8.3p |
+--------------------------------------------+-------+---------------+---------------+
| | | | |
+--------------------------------------------+-------+---------------+---------------+
| Earnings per share | | | |
+--------------------------------------------+-------+---------------+---------------+
| Basic earnings per share | 22 | (38.1)p | (10.1)p |
+--------------------------------------------+-------+---------------+---------------+
| Diluted earnings per share | 22 | (38.1)p | (10.1)p |
+--------------------------------------------+-------+---------------+---------------+
+--------------------------+-------+------------+---------------+------------+---------------+
| Balance sheets at 28th December 2008 |
+--------------------------------------------------------------------------------------------+
| | | | |
+--------------------------+-------+----------------------------+----------------------------+
| | | Group | Company |
+--------------------------+-------+----------------------------+----------------------------+
| |Notes | 28th |30th December | 28th |30th December |
| | | December | 2007 | December | 2007 |
| | | 2008 | | 2008 | |
+--------------------------+-------+------------+---------------+------------+---------------+
| | | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------+-------+------------+---------------+------------+---------------+
| Assets | | | | | |
+--------------------------+-------+------------+---------------+------------+---------------+
| Non-current assets | | | | | |
+--------------------------+-------+------------+---------------+------------+---------------+
| Goodwill | 11 | 15,661 | 42,628 | - | - |
+--------------------------+-------+------------+---------------+------------+---------------+
| Intangible assets | 11 | 698 | 124 | - | - |
+--------------------------+-------+------------+---------------+------------+---------------+
| Investment property | 12 | 3,169 | - | - | - |
+--------------------------+-------+------------+---------------+------------+---------------+
| Investments | 13 | - | - | 106,749 | 168,461 |
+--------------------------+-------+------------+---------------+------------+---------------+
| Property, plant and | 14 | 33,339 | 45,664 | 413 | 488 |
| equipment | | | | | |
+--------------------------+-------+------------+---------------+------------+---------------+
| Deferred tax asset | 27 | 3,384 | - | - | - |
+--------------------------+-------+------------+---------------+------------+---------------+
| | | 56,251 | 88,416 | 107,162 | 168,949 |
+--------------------------+-------+------------+---------------+------------+---------------+
| Current assets | | | | | |
+--------------------------+-------+------------+---------------+------------+---------------+
| Inventories | 16 | 1,755 | 1,596 | - | - |
+--------------------------+-------+------------+---------------+------------+---------------+
| Trade and other | 17 | 7,264 | 6,667 | 653 | 1,110 |
| receivables | | | | | |
+--------------------------+-------+------------+---------------+------------+---------------+
| Assets held for resale | 18 | - | 4,463 | - | - |
+--------------------------+-------+------------+---------------+------------+---------------+
| Financial assets | 19 | 20 | 260 | 20 | 239 |
+--------------------------+-------+------------+---------------+------------+---------------+
| Cash and cash | 20 | 2,386 | 716 | 46 | 188 |
| equivalents | | | | | |
+--------------------------+-------+------------+---------------+------------+---------------+
| | | 11,425 | 13,702 | 719 | 1,537 |
+--------------------------+-------+------------+---------------+------------+---------------+
| | | | | | |
+--------------------------+-------+------------+---------------+------------+---------------+
| Liabilities | | | | | |
+--------------------------+-------+------------+---------------+------------+---------------+
| Current liabilities | | | | | |
+--------------------------+-------+------------+---------------+------------+---------------+
| Financial liabilities | 24 | (3,750) | (5,032) | (1,488) | (522) |
+--------------------------+-------+------------+---------------+------------+---------------+
| Trade and other payables | 25 | (9,385) | (10,437) | (66,176) | (75,212) |
+--------------------------+-------+------------+---------------+------------+---------------+
| Provisions | 26 | (696) | (148) | - | - |
+--------------------------+-------+------------+---------------+------------+---------------+
| | | (13,831) | (15,617) | (67,664) | (75,734) |
+--------------------------+-------+------------+---------------+------------+---------------+
| Net current liabilities | | (2,406) | (1,915) | (66,945) | (74,197) |
+--------------------------+-------+------------+---------------+------------+---------------+
| | | | | | |
+--------------------------+-------+------------+---------------+------------+---------------+
| Non-current liabilities | | | | | |
+--------------------------+-------+------------+---------------+------------+---------------+
| Financial liabilities | 24 | (5,158) | (2,791) | - | - |
+--------------------------+-------+------------+---------------+------------+---------------+
| Other non-current | 25 | (1,148) | (1,344) | - | (20) |
| liabilities | | | | | |
+--------------------------+-------+------------+---------------+------------+---------------+
| Provisions | 26 | (7,322) | (1,034) | - | - |
+--------------------------+-------+------------+---------------+------------+---------------+
| Deferred tax liability | 27 | - | (1,993) | - | - |
+--------------------------+-------+------------+---------------+------------+---------------+
| | | (13,628) | (7,162) | - | (20) |
+--------------------------+-------+------------+---------------+------------+---------------+
| | | | | | |
+--------------------------+-------+------------+---------------+------------+---------------+
| Net assets | | 40,217 | 79,339 | 40,217 | 94,732 |
+--------------------------+-------+------------+---------------+------------+---------------+
| | | | | | |
+--------------------------+-------+------------+---------------+------------+---------------+
| Equity | | | | | |
+--------------------------+-------+------------+---------------+------------+---------------+
| Share capital | 21 | 6,140 | 6,140 | 6,140 | 6,140 |
+--------------------------+-------+------------+---------------+------------+---------------+
| Share premium | | 34,841 | 34,841 | 34,841 | 34,841 |
+--------------------------+-------+------------+---------------+------------+---------------+
| Other reserves | | 57,724 | 57,724 | 166 | 166 |
+--------------------------+-------+------------+---------------+------------+---------------+
| (Deficit)/earnings | | (58,488) | (19,366) | (930) | 53,585 |
+--------------------------+-------+------------+---------------+------------+---------------+
| Total equity | | 40,217 | 79,339 | 40,217 | 94,732 |
+--------------------------+-------+------------+---------------+------------+---------------+
+----------------------------------------------+-------+----------------+---------------+
| Cash flow statements for the 52 week period ended 28th December 2008 |
| |
+---------------------------------------------------------------------------------------+
| Group |Notes | 52 weeks to | 52 weeks to |
| | | 28th December |30th December |
| | | 2008 | 2007 |
+----------------------------------------------+-------+----------------+---------------+
| | | GBP000 | GBP000 |
+----------------------------------------------+-------+----------------+---------------+
| Cash flows from operating activities | | | |
+----------------------------------------------+-------+----------------+---------------+
| Cash generated from operations* | 23 | 3,505 | 12,372 |
+----------------------------------------------+-------+----------------+---------------+
| Interest received | | 710 | 326 |
+----------------------------------------------+-------+----------------+---------------+
| Interest paid | | (1,279) | (11,740) |
+----------------------------------------------+-------+----------------+---------------+
| Net cash from operating activities | | 2,936 | 958 |
+----------------------------------------------+-------+----------------+---------------+
| Cash flows from investing activities | | | |
+----------------------------------------------+-------+----------------+---------------+
| Proceeds from sale of property, plant and | | 5,959 | 80,859 |
| equipment* | | | |
+----------------------------------------------+-------+----------------+---------------+
| Purchase of property, plant and equipment | | (6,138) | (11,568) |
+----------------------------------------------+-------+----------------+---------------+
| Purchase of goodwill | | - | (3,114) |
+----------------------------------------------+-------+----------------+---------------+
| Purchase of software | | (1,900) | (451) |
+----------------------------------------------+-------+----------------+---------------+
| Discontinued businesses | | - | 29,918 |
+----------------------------------------------+-------+----------------+---------------+
| Net cash (used in)/ from investing | | (2,079) | 95,644 |
| activities | | | |
+----------------------------------------------+-------+----------------+---------------+
| Cash flows from financing activities | | | |
+----------------------------------------------+-------+----------------+---------------+
| Finance lease principal payments | | (71) | (84) |
+----------------------------------------------+-------+----------------+---------------+
| Receipts from borrowings | | 5,299 | 9,634 |
+----------------------------------------------+-------+----------------+---------------+
| Repayment of borrowings | | (3,870) | (110,663) |
+----------------------------------------------+-------+----------------+---------------+
| Net cash from/ (used in) financing | | 1,358 | (101,113) |
| activities | | | |
+----------------------------------------------+-------+----------------+---------------+
| | | | |
+----------------------------------------------+-------+----------------+---------------+
| Net increase/ (decrease) in cash, cash | | 2,215 | (4,511) |
| equivalents and bank overdrafts | | | |
+----------------------------------------------+-------+----------------+---------------+
| Cash, cash equivalents and bank overdrafts - | 20 | 171 | 4,682 |
| beginning of period | | | |
+----------------------------------------------+-------+----------------+---------------+
| Cash, cash equivalents and bank overdrafts - | 20 | 2,386 | 171 |
| end of period | | | |
+----------------------------------------------+-------+----------------+---------------+
+----------------------------------------------+-------+----------------+---------------+
| Company |Notes | 52 weeks to | 52 weeks to |
| | | 28th December |30th December |
| | | 2008 | 2007 |
+----------------------------------------------+-------+----------------+---------------+
| | | GBP000 | GBP000 |
+----------------------------------------------+-------+----------------+---------------+
| Cash flows from operating activities | | | |
+----------------------------------------------+-------+----------------+---------------+
| Cash used in operations | 23 | (3,549) | (5,449) |
+----------------------------------------------+-------+----------------+---------------+
| Interest received | | 785 | 361 |
+----------------------------------------------+-------+----------------+---------------+
| Interest paid | | (65) | (10,625) |
+----------------------------------------------+-------+----------------+---------------+
| Net cash used in operating activities | | (2,829) | (15,713) |
+----------------------------------------------+-------+----------------+---------------+
| Cash flows from investing activities | | | |
+----------------------------------------------+-------+----------------+---------------+
| Discontinued businesses | | - | (1,086) |
+----------------------------------------------+-------+----------------+---------------+
| Purchase of property, plant and equipment | | (5) | (15) |
+----------------------------------------------+-------+----------------+---------------+
| Dividends from subsidiaries | | - | 138,833 |
+----------------------------------------------+-------+----------------+---------------+
| Net cash (used in)/ from investing | | (5) | 137,732 |
| activities | | | |
+----------------------------------------------+-------+----------------+---------------+
| Cash flows from financing activities | | | |
+----------------------------------------------+-------+----------------+---------------+
| Receipts from borrowings | | - | 9,384 |
+----------------------------------------------+-------+----------------+---------------+
| Borrowings from subsidiaries, net | | 2,142 | (23,657) |
+----------------------------------------------+-------+----------------+---------------+
| Finance charges | | - | (1,311) |
+----------------------------------------------+-------+----------------+---------------+
| Repayment of borrowings | | - | (110,521) |
+----------------------------------------------+-------+----------------+---------------+
| Net cash from/ (used in) financing | | 2,142 | (126,105) |
| activities | | | |
+----------------------------------------------+-------+----------------+---------------+
| | | | |
+----------------------------------------------+-------+----------------+---------------+
| Net decrease in cash, cash equivalents and | | (692) | (4,086) |
| bank overdrafts | | | |
+----------------------------------------------+-------+----------------+---------------+
| Cash, cash equivalents and bank overdrafts - | 20 | (750) | 3,336 |
| beginning of period | | | |
+----------------------------------------------+-------+----------------+---------------+
| Cash, cash equivalents and bank overdrafts - | 20 | (1,442) | (750) |
| end of period | | | |
+----------------------------------------------+-------+----------------+---------------+
| * Cash generated from operations and proceeds from sale of property, plant and |
| equipment for the 52 weeks to 30th December 2007 have been restated to show GBP1.75m |
| of deferred consideration due on the sale and leaseback of Stockport bowl as a |
| movement in working capital and not as sale proceeds. This GBP1.75m was received in |
| cash on 30th December 2008. |
+----------------------------------------------+-------+----------------+---------------+
Statements of changes in equity for the 52 week period ended 28th December 2008
+----------------------------+------+----------+-----------+-----------+----------+----------+
| Group | | Share | Share | Other |Retained | Total |
| | | capital | premium | reserves |earnings | equity |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| | | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| | | | | | | |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| Balance at 1st January | | 6,140 | 34,841 | 57,724 | (8,934) | 89,771 |
| 2007 | | | | | | |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| | | | | | | |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| Loss for the period | | - | - | - | (10,422) | (10,422) |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| Share incentive plan | | - | - | - | (10) | (10) |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| | | | | | | |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| Balance at 30th December | | 6,140 | 34,841 | 57,724 | (19,366) | 79,339 |
| 2007 | | | | | | |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| | | | | | | |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| Loss for the period | | - | - | - | (39,122) | (39,122) |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| | | | | | | |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| Balance at 28th December | | 6,140 | 34,841 | 57,724 | (58,488) | 40,217 |
| 2008 | | | | | | |
+----------------------------+------+----------+-----------+-----------+----------+----------+
+----------------------------+------+----------+-----------+-----------+----------+----------+
| Company | | Share | Share | Other |Retained | Total |
| | | capital | premium | reserves |earnings | equity |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| | | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| | | | | | | |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| Balance at 1st January | | 6,140 | 34,841 | 166 | 41,759 | 82,906 |
| 2007 | | | | | | |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| | | | | | | |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| Profit for the period | | - | - | - | 11,836 | 11,836 |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| Share incentive plan | | - | - | - | (10) | (10) |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| | | | | | | |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| Balance at 30th | | 6,140 | 34,841 | 166 | 53,585 | 94,732 |
| December 2007 | | | | | | |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| | | | | | | |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| Loss for the period | | - | - | - | (54,515) | (54,515) |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| | | | | | | |
+----------------------------+------+----------+-----------+-----------+----------+----------+
| Balance at 28th December | | 6,140 | 34,841 | 166 | (930) | 40,217 |
| 2008 | | | | | | |
+----------------------------+------+----------+-----------+-----------+----------+----------+
Georgica PLC
Preliminary results for the 52 week period ended 28th December 2008
The preliminary results incorporate the results of Georgica PLC and all its
subsidiary undertakings (together "the group"), for the 52 week period from 31st
December 2007 to 28th December 2008. The comparative 2007 results covered the 52
week period from 1st January 2007 to 30th December 2007.
The directors do not recommend the payment of a dividend for the period to 28th
December 2008 (2007: nil)
The financial information set out above does not constitute the company's
statutory accounts under the meaning in Section 240 Companies Act 1985 for the
period ended 28th December 2008 or 30th December 2007, but is derived from those
accounts which were approved by the directors on 9th March 2009. Statutory
accounts for 2007 have been delivered to the Registrar of Companies and those
for 2008 will be delivered following the company's annual general meeting. The
auditors have reported on those accounts; their reports were unqualified and did
not contain statements under section 237(2) or (3) Companies Act 1985.
Statement of compliance
Both the parent company financial statements and the group financial statements
have been prepared and approved by the directors in accordance with
International Financial Reporting Standards as adopted by the European Union
("Adopted IFRSs") and those parts of the Companies Act 1985 applicable to
companies reporting under IFRS. IFRS is subject to an ongoing process of review
and endorsement by the European Commission and amendment and interpretation by
the International Accounting Standards Board.
The following new standards, amendments to standards or interpretations are
mandatory for the first time for the financial year ending 28th December 2008,
but are not currently relevant for the group: IFRIC 11, 'IFRS 2 - Group and
treasury share transactions'; IFRIC 12, 'Service concession arrangements', and
IFRIC 14 - IAS 19, 'The limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction'. The following new standards, amendments to
standards or interpretations have been issued but are not effective for the
financial year ending 28th December 2008 and have not been early adopted: IFRS
8, 'Operating segments'; IAS 23 (amendment), 'Borrowing costs'; IFRS 2
(amendment),'Share-based payment'; IFRS 3 (amendment), 'Business combinations'
and consequential amendments to IAS 27, 'Consolidated and separate financial
statements', IAS 28, 'Investments in associates' and IAS 31, 'Interests in joint
ventures'; IAS 1 (amendment), 'Presentation of financial statements'; IAS 32
(amendment), 'Financial instruments: presentation' and consequential amendments
to IAS 1, 'Presentation of financial statements'; IFRIC 13, 'Customer loyalty
programmes'; IFRS 1 (amendment), 'First time adoption of IFRS' and consequential
amendments to IAS 27, 'Consolidated and separate financial statements'; IAS 27
(amendment), 'Consolidated and separate financial statements'; IAS 1(amendment),
'Presentation of financial statements'; IAS 21 (amendment), 'Net investment in a
foreign operation'; IFRIC 15, 'Agreements for construction of real estates';
IFRIC 16, 'Hedges of a net investment in a foreign operation'; IFRIC 17,
'Distributions of non-cash assets to owners' and IFRIC 18, 'Transfer of assets
to customers'. None of these new standards, amendments to standards or
interpretations have had an impact on these financial statements.
Basis of preparation
The financial statements have been prepared under the historical cost
convention, as modified by the revaluation of derivative instruments to fair
value through the income statement, and incorporate the consolidated results of
Georgica PLC and all its subsidiaries for the period ended 28th December 2008.
The financial information for the 52 week period to 30th December 2007 has been
extracted from the financial statements for that period, on which the auditors
gave an unqualified opinion, and which have been filed with the Registrar of
Companies. Critical accounting estimates and judgments
The preparation of financial statements requires the use of accounting
estimates, and requires management to exercise judgment in the process of
applying the group's accounting policies. Accounting estimates are based on
historical experience and various other factors, including expectations of
future events that are believed to be reasonable under the circumstances, the
results of which form the basis of making the judgments about the carrying
values of assets and liabilities that are not readily available from other
sources.
The principal balance sheet accounts affected by judgment are goodwill (affected
by the valuation of assets acquired and by impairment assessments), tangible
fixed assets (affected by impairment assessments and estimates of useful life
and residual value), investment properties (affected by valuation assumptions),
financial assets (affected by valuation assumptions), other non-current
liabilities (affected by the assumptions used to value share based payments),
onerous lease provisions and deferred tax. Actual results may differ from these
estimates. The effect of varying the key assumptions in the goodwill and
tangible fixed asset impairment calculations is presented in note 11. The effect
of a 1% change in the corporation tax rate on the value of the group's deferred
tax asset is presented in note 27.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both the current and
future periods.
Basis of consolidation
Subsidiaries, which are companies in which the group holds more than 50% of the
voting rights and over which it has the power to govern the financial and
operating policies, are consolidated from the date on which control passes to
the group, and cease to be consolidated from the date on which control passes
from the group. All intercompany balances and transactions, and any unrealised
gains on transactions between group companies are eliminated.
On acquisition of a subsidiary, all of the identifiable acquired assets
(including intangible assets), liabilities and contingent liabilities are
recorded at their fair values, reflecting their condition on the date control
passes. The cost of an acquisition is measured as the fair value of the assets
given, equity instruments issued and liabilities incurred or assumed, plus
expenses directly attributable to the acquisition. The excess of the cost of the
acquisition over the fair value of the group's share of the identifiable net
assets acquired is recorded as goodwill.
Functional currency
The financial information in this report is presented in sterling, the
functional currency of the company and group, rounded to the nearest thousand.
Revenue
Revenue represents the total amounts earned from customers for bowling games,
use of pool tables, use of amusement machines and bar and food sales, together
with any other goods and services delivered in the normal course of business,
net of VAT. All other revenue is derived from daily takings and is recorded at
the point of sale.
Intangible assets
Goodwill
Goodwill represents the excess of the cost of the acquisition of a subsidiary or
business over the fair value of the group's share of the identifiable net assets
acquired. Goodwill is carried at cost less impairment, and is tested annually
for impairment, or earlier if circumstances indicate that an impairment may have
occurred. Negative goodwill arising on acquisition is recognised immediately in
the income statement.
Trademarks
Trademarks acquired by the group are capitalised on acquisition at cost. They
are amortised to the income statement in equal annual instalments over a period
of 5 years which is their estimated useful economic life.
Software
Software costs are capitalised and depreciated over their estimated useful lives
of up to 3 years.
Property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated depreciation
and any impairment in value. Depreciation is calculated so as to write off the
cost, less estimated residual value, of each asset on a straight line basis over
its expected useful economic life. The principal annual rates used for this
purpose are as follows:
Long leasehold premises The shorter of 50 years or their estimated useful
lives
Short leasehold premises Their estimated useful lives
Fixtures, fittings and equipment Between 3 and 20 years
Bowling lanes 40 years
Assets in the course of construction are not depreciated until they are brought
into use. Residual value is calculated based upon prices prevailing at the date
of acquisition, and is reassessed annually.
Impairment of assets
At each reporting date, all assets are considered for evidence of impairment. If
there is an indication of impairment, the group carries out an impairment test
by measuring the asset's recoverable amount, which is the higher of the fair
value less costs to sell and the value in use. If this recoverable amount is
below the carrying value, an impairment loss is recognised in the income
statement and the asset is written down to the recoverable amount. In assessing
value in use, the estimated future cash flows arising from the use of the asset
are discounted to their present value using a discount rate which reflects
current market assessments of the time value of money and the risks specific to
the asset. Impairment of the group's operating businesses is assessed at the
cash generating unit (CGU) level, with goodwill allocated to each CGU for this
purpose. Impairment losses are charged to the income statement in the period in
which they are identified and are allocated first to goodwill then to carrying
amounts of other assets in the CGU.
Reversals of impairment
An impairment loss in respect of a held-to-maturity security or receivable
carried at amortised cost is reversed if the subsequent increase in recoverable
amount can be related objectively to an event occurring after the impairment
loss was recognised. An impairment loss in respect of goodwill is not reversed.
In respect of other assets, an impairment loss is reversed when there is an
indication that the impairment loss may no longer exist and there has been a
change in the estimates used to determine the recoverable amount. An impairment
loss is reversed only to the extent that the asset's carrying amount does not
exceed the carrying amount that would have been determined, net of depreciation
or amortisation, if no impairment loss had been recognised.
Property disposals
Disposals of properties and any resultant gain or loss on disposal are
recognised in the income statement once all conditions of the sale contract
become unconditional.
Investment properties
Investment properties are included in the balance sheet as non-current assets,
brought in at cost and revalued to fair value at each reporting date.
Investments
Fixed asset investments are stated at cost less any provision for impairment in
value.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is
calculated as cost of purchase on a first in, first out basis based on normal
levels of activity. Net realisable value is based on estimated selling price,
less further costs expected to be incurred to completion and disposal. Provision
is made for obsolete, slow-moving or defective items where appropriate.
Trade and other receivables
Trade and other receivables are stated at their cost less impairment losses.
Financial assets
The group classifies its financial assets as either at fair value through profit
and loss (all of which were designated as such upon recognition) or as loans and
receivables. There are no financial assets held as available for sale.
Financial assets at fair value through profit and loss: financial assets held
for interest rate management are classified in this category - the group uses
two forms of derivative financial instrument to reduce exposure to interest rate
increases; interest rate caps and interest rate swaps. These derivatives are
initially recognised at fair value on the date the contract is entered into, and
are subsequently recognised at fair value re-measured as at each reporting date.
The gain or loss on re-measurement to fair value is recognised in finance costs
in the income statement.
Loans and receivables: non-derivative financial assets with fixed or
determinable payments - loans and receivables are classified as "trade and other
receivables" in the balance sheet.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank
overdrafts that are repayable on demand and form an integral part of the group's
cash management are included as a component of cash and cash equivalents for the
purpose of the statement of cash flows.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less
attributable transaction costs. Subsequent to initial recognition,
interest-bearing borrowings are stated at amortised cost with any difference
between cost and redemption value being recognised in the income statement over
the period of the borrowings on an effective interest basis.
Trade and other payables
Trade and other payables are stated at cost.
Leases
Costs incurred in respect of operating leases are charged to the income
statement on a straight line basis over the term of the lease. Benefits received
and receivable as an incentive to sign an operating lease are similarly spread
on a straight line basis over the lease term. The majority of the group's short
term property leases are treated as operating leases.
Finance lease arrangements, which transfer substantially all of the benefits and
risks of ownership of the related property to the group, are treated as if the
property had been acquired. The properties are included in property, plant and
equipment, classified as long leasehold premises, and the capital element of the
leasing commitment is shown as a finance lease obligation in liabilities. Lease
rentals are separated into capital and interest elements, with the capital
element applied to reduce the finance lease obligation and the interest element
charged to finance costs in the income statement, so as to give a constant
periodic rate of charge on the remaining balance of the obligation outstanding
at each accounting period end.
Cash settled share based payments
The group operates a long-term cash settled incentive plan linked to growth in
shareholder value. It consists of a number of tranches of options, linked to the
performance of the company's shares, granted to executive directors and senior
employees. The options are accounted for at valuation, using the Binomial Model
and taking into account relevant factors such as share price volatility, share
price growth hurdles, lapse rates and dividend expectations. The fair value of
each tranche of options over performance shares made under the plan is
recognised in the income statement over the period from the effective date of
grant to the vesting date for that tranche. Operating profit for the period is
reduced by the cost of options allocated to that period, based on the valuation
as at the period end, together with any adjustment to charges recorded in
earlier periods due to revisions in the valuation in the period, which
principally arise from changes in Georgica's share price.
Provisions
Provisions are recognised when the group has a present obligation (legal or
constructive) as the result of a past event and it is both probable that an
outflow of resources will be required to settle the obligation and the amount of
the obligation can be reliably estimated. Where the group expects to be
reimbursed for an outflow of resources associated with a provision, for example
under an insurance contract, the expected reimbursement is recognised as a
separate asset but only when the reimbursement is virtually certain. If the
effect of the time value of money is material, provisions are calculated by
discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and, where appropriate,
the risks specific to the liability. Where discounting is used, the increase in
the provision due to the unwinding of the discount over time is charged to
finance costs in the income statement.
Onerous lease commitments
Provisions are recognised for the present value of onerous leases and vacant
properties, calculated as the expected net cash out flows over the remaining
life of the lease, discounted at a rate which approximates the group's weighted
average cost of capital. Notional interest is charged in respect of the
unwinding of the discount.
Debt issue costs
Issue costs of debt are recognised in the income statement on a systematic basis
over the term of the debt.
Tax
The tax charge comprises current tax payable and deferred tax. The current tax
charge represents an estimate of the tax payable in respect of the group's
taxable profits and is based on an interpretation of existing tax laws.
As required by IAS 12 (revised), the group provides deferred income tax using
the balance sheet liability method on all temporary differences between the tax
bases of assets and liabilities and their carrying values at the balance sheet
date. Deferred income tax assets and liabilities so recognised are determined
using the tax rates and laws that have been enacted or substantively enacted by
the balance sheet date and are based on the expected manner of realisation or
settlement of the carrying amount of the assets or liabilities. Deferred income
tax assets are recognised to the extent that it is probable that future taxable
profits will be available against which the temporary differences can be
utilised. Deferred income tax balances are not discounted. Deferred tax is not
recognised in respect of the initial recognition of an asset or liability
acquired in a transaction which is not a business combination and at the time of
the transaction does not affect accounting or taxable profits.
Segment reporting
A segment is a distinguishable component of the group that is engaged either in
providing products or services (business segment). The group wholly operates
within the United Kingdom.
Discontinued operations
A discontinued operation is a component of the group's business that either has
been disposed of or classified as held for sale or is a company or group of
companies to which a receiver or administrator has been appointed and over which
the group does not exercise control.
Dividends
Dividends receivable are recognised when the right to receive the dividend is
established, which is generally when the dividend is received.
Company and group reserves
The company's reserves comprise a share premium account of GBP34,841,000, a
special capital reserve of GBP49,000 and a capital redemption reserve of
GBP117,000. None of these reserves is distributable.
The group's reserves comprise the share premium account, the special capital
reserve of GBP49,000, the capital redemption reserve of GBP117,000 together with
a merger reserve of GBP56,882,000, which arose on the takeover of Allied Leisure
by Georgica in 2000 and a reserve arising on consolidation of GBP676,000, which
arose on the acquisition of the 50% of the Megabowl joint venture not previously
owned in 2003.
1 Segment reporting
Segment information is presented in respect of the group's business segments.
Segment results, assets and liabilities include items directly attributable to a
segment as well as those that can be allocated on a reasonable basis. Segment
capital expenditure is the total cost incurred during the period to acquire
segment assets that are expected to be used for more than one period.
Business segments
The group comprises the following main business segments:
Tenpin (Bowls) - Tenpin is the largest tenpin bowling operator in the UK with an
approximate 20% share of the UK market.
Georgica - this comprises 6 properties held as investment properties together
with central management, being company secretarial and the board, central
finance, head office assets and costs and group debt.
The segment results and capital expenditure for the 52 week period ended
28th December 2008 and the segment assets and liabilities at 28th December
2008 are as follows:
+--------------------------------------------+------------+------------+------------+
| | | | Total |
+--------------------------------------------+------------+------------+------------+
| | Tenpin | Georgica | Group |
+--------------------------------------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 |
+--------------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------------+------------+------------+------------+
| Segment revenue - external | 62,814 | - | 62,814 |
+--------------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------------+------------+------------+------------+
| Operating loss - segment result | (41,689) | (1,879) | (43,568) |
+--------------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------------+------------+------------+------------+
| Net interest | | | (931) |
+--------------------------------------------+------------+------------+------------+
| Loss before tax | | | (44,499) |
+--------------------------------------------+------------+------------+------------+
| Tax | | | 5,377 |
+--------------------------------------------+------------+------------+------------+
| Loss after tax for the period | | | (39,122) |
+--------------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------------+------------+------------+------------+
| Other segment items included in the income | | | |
| statement | | | |
+--------------------------------------------+------------+------------+------------+
| Impairment of goodwill | (26,772) | - | (26,772) |
+--------------------------------------------+------------+------------+------------+
| Impairment of intangible assets | (787) | - | (787) |
+--------------------------------------------+------------+------------+------------+
| Depreciation of property plant and | (3,845) | (79) | (3,924) |
| equipment | | | |
+--------------------------------------------+------------+------------+------------+
| Impairment of property, plant and | (11,460) | - | (11,460) |
| equipment | | | |
+--------------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------------+------------+------------+------------+
| Segment assets | 64,372 | 2,932 | 67,304 |
+--------------------------------------------+------------+------------+------------+
| Segment liabilities | (26,714) | (373) | (27,087) |
+--------------------------------------------+------------+------------+------------+
| Net assets | 37,658 | 2,559 | 40,217 |
+--------------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------------+------------+------------+------------+
| Capital expenditure | 6,928 | 5 | 6,933 |
+--------------------------------------------+------------+------------+------------+
Capital expenditure comprises additions to property, plant and equipment and
intangible assets, including additions resulting from acquisitions through
business combinations.
The segment results and capital expenditure, including the purchase of goodwill
and intangible assets, for the 52 week period ended 30th December 2007 and the
segment assets and liabilities at 30th December 2007 are as follows:
+--------------------------------+----------+----------+------------+--------------+----------+
| | | |Continuing |Discontinued | Total |
+--------------------------------+----------+----------+------------+--------------+----------+
| | Tenpin |Georgica | Business | Business | Group |
+--------------------------------+----------+----------+------------+--------------+----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------------+----------+----------+------------+--------------+----------+
| | | | | | |
+--------------------------------+----------+----------+------------+--------------+----------+
| Segment revenue - external | 65,681 | - | 65,681 | - | 65,681 |
+--------------------------------+----------+----------+------------+--------------+----------+
| | | | | | |
+--------------------------------+----------+----------+------------+--------------+----------+
| Operating profit - segment | 28,228 | (5,108) | 23,120 | - | 23,120 |
| result | | | | | |
+--------------------------------+----------+----------+------------+--------------+----------+
| | | | | | |
+--------------------------------+----------+----------+------------+--------------+----------+
| Net interest | | | (15,959) | - | (15,959) |
+--------------------------------+----------+----------+------------+--------------+----------+
| Profit before tax | | | 7,161 | - | 7,161 |
+--------------------------------+----------+----------+------------+--------------+----------+
| Tax | | | 1,392 | - | 1,392 |
+--------------------------------+----------+----------+------------+--------------+----------+
| Discontinued operations, | | | - | (18,975) | (18,975) |
| net (see note 8) | | | | | |
+--------------------------------+----------+----------+------------+--------------+----------+
| Profit/(loss) after tax for | | | 8,553 | (18,975) | (10,422) |
| the period | | | | | |
+--------------------------------+----------+----------+------------+--------------+----------+
| | | | | | |
+--------------------------------+----------+----------+------------+--------------+----------+
| Other segment items included | | | | | |
| in the income statement | | | | | |
+--------------------------------+----------+----------+------------+--------------+----------+
| Impairment of goodwill | (1,837) | - | (1,837) | (130) | (1,967) |
+--------------------------------+----------+----------+------------+--------------+----------+
| Depreciation of property plant | (3,927) | (100) | (4,027) | (3,535) | (7,562) |
| and equipment | | | | | |
+--------------------------------+----------+----------+------------+--------------+----------+
| Impairment of property, plant | (1,412) | - | (1,412) | - | (1,412) |
| and equipment | | | | | |
+--------------------------------+----------+----------+------------+--------------+----------+
| | | | | | |
+--------------------------------+----------+----------+------------+--------------+----------+
| Segment assets | 96,223 | 5,895 | 102,118 | - | 102,118 |
+--------------------------------+----------+----------+------------+--------------+----------+
| Segment liabilities | (20,749) | (2,030) | (22,779) | - | (22,779) |
+--------------------------------+----------+----------+------------+--------------+----------+
| Net assets | 75,474 | 3,865 | 79,339 | - | 79,339 |
+--------------------------------+----------+----------+------------+--------------+----------+
| | | | | | |
+--------------------------------+----------+----------+------------+--------------+----------+
| Capital expenditure | 6,563 | 16 | 6,579 | 7,654 | 14,233 |
+--------------------------------+----------+----------+------------+--------------+----------+
Discontinued Business comprises the results for the period of the Rileys
operation, which was sold on 28th August 2007, together with the loss on sale of
the Rileys operation. It also includes a GBP200,000 benefit arising from the
receivership of Allied Leisure, which was discontinued in 2004.
Geographical segments
All activities are conducted in the United Kingdom.
2 Profit on disposal of properties
Profit on disposal of properties comprises:
+---------------------------------------+---------+---+----------------+----------------+
| | | |52 week period |52 week period |
| | | | ended | ended |
| | | | 28th December | 30th December |
| | | | 2008 | 2007 |
+---------------------------------------+---------+---+----------------+----------------+
| | | | GBP000 | GBP000 |
+---------------------------------------+---------+---+----------------+----------------+
| Sale of Cardiff bowl | | | 663 | - |
+---------------------------------------+---------+---+----------------+----------------+
| Sale and leaseback of Stoke bowl | | | 2,248 | - |
+---------------------------------------+---------+---+----------------+----------------+
| Closure of Kinnaird Park bowl | | | (502) | - |
| (Edinburgh) | | | | |
+---------------------------------------+---------+---+----------------+----------------+
| Closure of Metro bowl (Gateshead) | | | (68) | - |
+---------------------------------------+---------+---+----------------+----------------+
| Sale of Westcliff Rileys | | | 1,097 | - |
+---------------------------------------+---------+---+----------------+----------------+
| Sale of Pontefract Rileys | | | 169 | - |
+---------------------------------------+---------+---+----------------+----------------+
| Sale and leaseback of 9 bowling | | | - | 27,896 |
| venues | | | | |
+---------------------------------------+---------+---+----------------+----------------+
| Sale of Plympton bowl | | | - | 487 |
+---------------------------------------+---------+---+----------------+----------------+
| Goodwill eliminated in respect of | | | (195) | (2,123) |
| disposals | | | | |
+---------------------------------------+---------+---+----------------+----------------+
| Continuing operations | | | 3,412 | 26,260 |
+---------------------------------------+---------+---+----------------+----------------+
During March 2008 Tenpin sold and leased back its bowl in Cardiff for
consideration of GBP1.54m, and a profit on disposal of GBP0.5m was recorded
after deducting costs of GBP0.2m, the net book value of GBP0.8m and goodwill
eliminated of GBP0.2m. The bowl closed in August 2008. The sale and leaseback of
Stoke bowl completed in April 2008 for consideration of GBP3.25m, with an
initial annual rent charge of GBP0.3m, and a profit of GBP2.2m was recorded.
This brings the total proceeds from sale and leasebacks completed in 2007 and
2008 to GBP46.25m, and the combined initial annual rent charge to GBP2.8m. Two
bowls in Edinburgh and Gateshead which were on short leases with regular breaks
were closed in April 2008, and a loss on disposal of GBP0.6m was
recorded. During 2008 the group also sold two of the eight cue sports clubs it
owns and leases to Rileys Limited. These were at Pontefract and Westcliff and
were sold for GBP2.3m. A profit of GBP1.3m was generated.
In 2007 Tenpin completed the sale and leaseback of 9 freehold and long leasehold
properties for cash consideration of GBP43.0m. A profit of GBP27.9m was
recorded. Tenpin also sold its Plymouth Plympton freehold site for redevelopment
for gross consideration of GBP3.1m. The profit on disposal was GBP0.5m. The
profit on disposal in 2007 was also net of a GBP2.1m write off of goodwill
related to disposals.
3 Staff costs and numbers
Staff costs and numbers - group
+---------------------+------------+--------------+----------+------------+--------------+----------+
| | 52 week period ended | 52 week period ended |
| | 28th December 2008 | 30th December 2007 |
+---------------------+--------------------------------------+--------------------------------------+
| |Continuing |Discontinued | Total |Continuing |Discontinued | Total |
| |operations | operations | |operations | operations | |
+---------------------+------------+--------------+----------+------------+--------------+----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+---------------------+------------+--------------+----------+------------+--------------+----------+
| Wages and salaries | 15,413 | - | 15,413 | 17,025 | 12,538 | 29,563 |
+---------------------+------------+--------------+----------+------------+--------------+----------+
| Social security | 1,188 | - | 1,188 | 1,506 | 1,039 | 2,545 |
| contributions | | | | | | |
+---------------------+------------+--------------+----------+------------+--------------+----------+
| Cash-settled share | (20) | - | (20) | (714) | - | (714) |
| based payments | | | | | | |
| (note 9) | | | | | | |
+---------------------+------------+--------------+----------+------------+--------------+----------+
| | 16,581 | - | 16,581 | 17,817 | 13,577 | 31,394 |
+---------------------+------------+--------------+----------+------------+--------------+----------+
Staff costs included within cost of sales is GBP13.3m (2007: GBP14.3m). The
balance of staff costs from continuing operations is recorded as an
administrative expense within overheads.
The average number of persons employed (including executive directors) during
the period, analysed by category, was as follows:
+---------------------+------------+--------------+----------+------------+--------------+----------+
| | 52 week period ended 28th | 52 week period ended 30th |
| | December 2008 | December 2007 |
+---------------------+--------------------------------------+--------------------------------------+
| |Continuing |Discontinued | Total |Continuing |Discontinued | Total |
| |operations | operations | |operations | operations | |
+---------------------+------------+--------------+----------+------------+--------------+----------+
| Weighted average | | | | | | |
| number of | | | | | | |
| employees: | | | | | | |
+---------------------+------------+--------------+----------+------------+--------------+----------+
| Staff | 1,091 | - | 1,091 | 1,312 | 1,467 | 2,779 |
+---------------------+------------+--------------+----------+------------+--------------+----------+
| Administration | 64 | - | 64 | 67 | 71 | 138 |
+---------------------+------------+--------------+----------+------------+--------------+----------+
| Unit management | 195 | - | 195 | 241 | 340 | 581 |
+---------------------+------------+--------------+----------+------------+--------------+----------+
| | 1,350 | - | 1,350 | 1,620 | 1,878 | 3,498 |
+---------------------+------------+--------------+----------+------------+--------------+----------+
Staff costs and numbers - company
+-------------------------------------+------------+------------+---------------+---------------+
| | | | 52 week | 52 week |
| | | | period | period |
| | | | ended | ended |
| | | |28th December |30th December |
| | | | 2008 | 2007 |
+-------------------------------------+------------+------------+---------------+---------------+
| | | | GBP000 | GBP000 |
+-------------------------------------+------------+------------+---------------+---------------+
| Wages and salaries | | | 926 | 1,372 |
+-------------------------------------+------------+------------+---------------+---------------+
| Social security contributions | | | 126 | 313 |
+-------------------------------------+------------+------------+---------------+---------------+
| Cash-settled share based payments | | | (20) | (714) |
| (note 9) | | | | |
+-------------------------------------+------------+------------+---------------+---------------+
| | | | 1,032 | 971 |
+-------------------------------------+------------+------------+---------------+---------------+
+-------------------------------------+------------+------------+---------------+---------------+
| | | | 52 week | 52 week |
| | | | period | period |
| | | | ended | ended |
| | | |28th December |30th December |
| | | | 2008 | 2007 |
+-------------------------------------+------------+------------+---------------+---------------+
| | | | Number | number |
+-------------------------------------+------------+------------+---------------+---------------+
| Administration (including executive | | | 7 | 10 |
| directors) | | | | |
+-------------------------------------+------------+------------+---------------+---------------+
| | | | 7 | 10 |
+-------------------------------------+------------+------------+---------------+---------------+
4 Interest payable and similar charges
+------------------------------------------+------------------+------------------+
| | 52 week period | 52 week period |
| | ended | ended |
| | 28th December | 30th December |
| | 2008 | 2007 |
+------------------------------------------+------------------+------------------+
| | GBP000 | GBP000 |
+------------------------------------------+------------------+------------------+
| Floating rate notes | - | 5,031 |
+------------------------------------------+------------------+------------------+
| Bank loans and overdrafts | 491 | 2,175 |
+------------------------------------------+------------------+------------------+
| Amortisation of deferred financing costs | 546 | 4,462 |
+------------------------------------------+------------------+------------------+
| Financial instruments | - | 149 |
+------------------------------------------+------------------+------------------+
| Finance leases | 281 | 338 |
+------------------------------------------+------------------+------------------+
| Other | 184 | 4,056 |
+------------------------------------------+------------------+------------------+
| Interest payable and similar charges - | 1,502 | 16,211 |
| continuing operations | | |
+------------------------------------------+------------------+------------------+
5 Interest receivable
+------------------------------------------+------------------+------------------+
| | 52 week period | 52 week period |
| | ended | ended |
| | 28th December | 30th December |
| | 2008 | 2007 |
+------------------------------------------+------------------+------------------+
| | GBP000 | GBP000 |
+------------------------------------------+------------------+------------------+
| Interest income on bank deposits | 179 | 252 |
+------------------------------------------+------------------+------------------+
| Financial instruments | 392 | - |
+------------------------------------------+------------------+------------------+
| Interest receivable - continuing | 571 | 252 |
| operations | | |
+------------------------------------------+------------------+------------------+
6 (Loss)/ profit before taxation
The following items have been included in arriving at (loss)/ profit before
taxation:
+------------------------------------+------------+------------+--------------+----------+
| | 52 week | 52 week period ended 30th |
| | period | December 2007 |
| |ended 28th | |
| | December | |
| | 2008 | |
+------------------------------------+------------+--------------------------------------+
| |Continuing |Continuing |Discontinued | Total |
| |operations |operations | operations | |
+------------------------------------+------------+------------+--------------+----------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+------------------------------------+------------+------------+--------------+----------+
| Staff costs (see note 3) | 16,581 | 17,817 | 13,577 | 31,394 |
+------------------------------------+------------+------------+--------------+----------+
| Consumables charged to cost of | 4,942 | 5,396 | 5,344 | 10,740 |
| sales | | | | |
+------------------------------------+------------+------------+--------------+----------+
| Depreciation of property, plant | 3,924 | 4,027 | 3,535 | 7,562 |
| and equipment | | | | |
+------------------------------------+------------+------------+--------------+----------+
| Depreciation and amortisation of | 548 | 164 | 13 | 177 |
| intangible assets | | | | |
+------------------------------------+------------+------------+--------------+----------+
| Impairment: | | | | |
+------------------------------------+------------+------------+--------------+----------+
| - property, plant and equipment | 11,460 | 1,412 | - | 1,412 |
+------------------------------------+------------+------------+--------------+----------+
| - goodwill | 26,772 | 1,837 | 130 | 1,967 |
+------------------------------------+------------+------------+--------------+----------+
| - intangible assets | 787 | - | - | - |
+------------------------------------+------------+------------+--------------+----------+
| Total impairment | 39,019 | 3,249 | 130 | 3,379 |
+------------------------------------+------------+------------+--------------+----------+
| Onerous lease provisions | 6,719 | 954 | (53) | 901 |
+------------------------------------+------------+------------+--------------+----------+
| Valuation loss on investment | 437 | - | - | - |
| properties | | | | |
+------------------------------------+------------+------------+--------------+----------+
| Operating lease rentals payable - | 10,461 | 8,273 | 2,840 | 11,113 |
| property | | | | |
+------------------------------------+------------+------------+--------------+----------+
| Repairs on property, plant and | 1,202 | 1,280 | 1,530 | 2,810 |
| equipment | | | | |
+------------------------------------+------------+------------+--------------+----------+
| Gains/(losses) on financial assets | 392 | (149) | - | (149) |
+------------------------------------+------------+------------+--------------+----------+
| Auditors' remuneration: | | | | |
+------------------------------------+------------+------------+--------------+----------+
| Audit of Georgica group and | 35 | 35 | - | 35 |
| company financial statements | | | | |
+------------------------------------+------------+------------+--------------+----------+
| Audit of subsidiary financial | 40 | 40 | - | 40 |
| statements | | | | |
+------------------------------------+------------+------------+--------------+----------+
| Transaction due diligence | 200 | 859 | - | 859 |
+------------------------------------+------------+------------+--------------+----------+
| Consulting services | 110 | 61 | - | 61 |
+------------------------------------+------------+------------+--------------+----------+
The PwC fees for transaction due diligence in 2008 are in respect of the
proposed sale of Georgica. In 2007 they also included demerger preparation and
the Tenpin and Rileys sale and leaseback transactions. The consulting services
are in respect of the members' voluntary liquidation of 9 group companies
initiated as part of the rationalisation of the group, and tax advice in
relation to the listing of the convertible shares of Georgica.
7. Taxation
Recognised in the income statement:
+--------------------------------------------+------------------+------------------+
| | 52 week period | 52 week period |
| | ended 28th | ended 30th |
| | December 2008 | December 2007 |
+--------------------------------------------+------------------+------------------+
| | GBP000 | GBP000 |
+--------------------------------------------+------------------+------------------+
| Current tax | - | - |
+--------------------------------------------+------------------+------------------+
| Deferred tax: | | |
+--------------------------------------------+------------------+------------------+
| Continuing operations: | | |
+--------------------------------------------+------------------+------------------+
| Origination and reversal of temporary | (5,377) | (1,392) |
| differences | | |
+--------------------------------------------+------------------+------------------+
| Total continuing operations | (5,377) | (1,392) |
+--------------------------------------------+------------------+------------------+
| Discontinued operations: | | |
+--------------------------------------------+------------------+------------------+
| Origination and reversal of temporary | - | 5,201 |
| differences | | |
+--------------------------------------------+------------------+------------------+
| Tax (credit)/ charge in income statement | (5,377) | 3,809 |
| (note 27) | | |
+--------------------------------------------+------------------+------------------+
Reconciliation of effective tax rate for continuing operations:
+----------------------------------------------------+---------------+--------------+
| | 52 week | 52 week |
| | period ended |period ended |
| | 28th | 30th |
| |December 2008 | December |
| | | 2007 |
+----------------------------------------------------+---------------+--------------+
| | GBP000 | GBP000 |
+----------------------------------------------------+---------------+--------------+
| (Loss)/profit before tax | (44,499) | 7,161 |
+----------------------------------------------------+---------------+--------------+
| | | |
+----------------------------------------------------+---------------+--------------+
| Tax using the UK corporation tax rate of 28.5% | (12,682) | 2,148 |
| (2007: 30%) | | |
+----------------------------------------------------+---------------+--------------+
| Permanent items | 7,516 | 721 |
+----------------------------------------------------+---------------+--------------+
| Reduction in corporation tax rate | - | (142) |
+----------------------------------------------------+---------------+--------------+
| Effect of tax losses | 1,648 | (3,240) |
+----------------------------------------------------+---------------+--------------+
| Prior year adjustment | (1,859) | (879) |
+----------------------------------------------------+---------------+--------------+
| Tax credit in income statement | (5,377) | (1,392) |
+----------------------------------------------------+---------------+--------------+
8 Discontinued operations
+----------------------------------------------------+---------------+--------------+
| | 52 week | 52 week |
| | period | period |
| | ended 28th | ended 30th |
| |December 2008 | December |
| | | 2007 |
+----------------------------------------------------+---------------+--------------+
| | GBP000 | GBP000 |
+----------------------------------------------------+---------------+--------------+
| | | |
+----------------------------------------------------+---------------+--------------+
| Disposal of Rileys | - | (19,175) |
+----------------------------------------------------+---------------+--------------+
| Receivership of Allied Leisure | - | 200 |
+----------------------------------------------------+---------------+--------------+
| Net loss from discontinued operations | - | (18,975) |
+----------------------------------------------------+---------------+--------------+
On 28th August 2007, Rileys Limited completed the sale and lease back of 44
freehold and long leasehold properties for cash consideration, before costs, of
GBP28.0m. A profit of GBP11.2m was recorded by Rileys, after deduction of fees
of GBP0.7m and the related net book value of GBP16.1m. On the same day Georgica
Holdings Limited sold the entire ordinary share capital of Rileys Limited to
Crucible Acquisitions Limited, an acquisition vehicle of Greenhill Capital
Partners Europe LLP and North Atlantic Value LLP (a shareholder in Georgica PLC
which is a related party as at 28th December 2008), for GBP34.9m consideration
received in cash. Accordingly, Rileys has been treated as a discontinued
operation in 2007. Also included in the discontinued operations line in the
income statement is the loss on disposal, being the loss on sale including
costs.
+----------------------------------------------------+---------------+--------------+
| | 52 week | 52 week |
| | period ended |period ended |
| | 28th | 30th |
| |December 2008 | December |
| | | 2007 |
+----------------------------------------------------+---------------+--------------+
| | GBP000 | GBP000 |
+----------------------------------------------------+---------------+--------------+
| Discontinued operations: | | |
| | | |
+----------------------------------------------------+---------------+--------------+
| Income statement disclosures in respect of | | |
| discontinued operations are: | | |
+----------------------------------------------------+---------------+--------------+
| Revenue | - | 40,613 |
+----------------------------------------------------+---------------+--------------+
| Profit from sale and leaseback | - | 11,234 |
+----------------------------------------------------+---------------+--------------+
| Expenses | - | (38,151) |
+----------------------------------------------------+---------------+--------------+
| Profit before tax | - | 13,696 |
+----------------------------------------------------+---------------+--------------+
| Tax on profit | - | (5,201) |
+----------------------------------------------------+---------------+--------------+
| Loss on sale | - | (27,470) |
+----------------------------------------------------+---------------+--------------+
| | | |
+----------------------------------------------------+---------------+--------------+
| The cash flows in respect of discontinued | | |
| operations are: | | |
+----------------------------------------------------+---------------+--------------+
| Cash generated from operating activities | - | 5,955 |
+----------------------------------------------------+---------------+--------------+
| Net cash generated from investing activities | - | 22,684 |
+----------------------------------------------------+---------------+--------------+
| Net cash used in financing activities | - | (29,768) |
+----------------------------------------------------+---------------+--------------+
The loss on sale of Rileys is calculated as follows:
+------------------------------------------------------------------+--------------+
| | 52 week |
| |period ended |
| | 30th |
| | December |
| | 2007 |
+------------------------------------------------------------------+--------------+
| | GBP000 |
+------------------------------------------------------------------+--------------+
| Total proceeds | 34,916 |
+------------------------------------------------------------------+--------------+
| Less: costs of disposal | (1,269) |
+------------------------------------------------------------------+--------------+
| Net proceeds | 33,647 |
+------------------------------------------------------------------+--------------+
| Net assets at 28th August 2007 | (61,117) |
+------------------------------------------------------------------+--------------+
| Loss on sale | (27,470) |
+------------------------------------------------------------------+--------------+
Discontinued operations in 2007 also include profits related to Allied Leisure
Limited and Megabowl Limited. In 2004 a receiver was appointed to Allied Leisure
Limited and an administrator was appointed to Megabowl Limited, both
subsidiaries of the company at that time. In June 2006 a settlement agreement
was signed with the Allied receiver, in accordance with which the group made a
settlement payment of GBP1.0m. The Allied receiver ceased to act in February
2008 and Allied Leisure Limited is in the process of being dissolved. In July
2006 a settlement agreement was signed with the Megabowl administrator, in
accordance with which the group made a settlement payment of GBP50,000. The
Megabowl administrator ceased to act in September 2006 and Megabowl was
dissolved in December 2006.
In 2007 Georgica's funding banks, being the secured creditors of both Allied
Leisure and Megabowl, received payments of GBP0.2m in respect of Allied Leisure.
Under the terms of the loan agreement these amounts were applied to reduce
Georgica's borrowings. A profit of GBP0.2m was recorded in 2007 in respect of
this.
9 Share-based payments
In 2001, the company established the Georgica Executive Participation Plan under
which share based payment options are granted to key management personnel and
senior employees. Grants on similar terms have been made each year since 2001.
Participants receive an option over a number of performance shares. The
performance share is a unit of measurement for the purposes of calculating
rewards under the plan and is equivalent in value to one ordinary share in the
company. The option over performance shares enables the participant to realise a
cash sum (or, at the discretion of the remuneration committee, a number of
ordinary shares) subject to the satisfaction of performance criteria and
continuing employment. The performance criteria are currently linked to growth
in the market value of the share price from the date the options were granted to
the exercise date. The options are exercisable on an unconditional offer for the
company, subject to certain criteria.
The number of performance shares currently issued under the scheme, and their
terms, are as follows:
+------------------------+---------------+--------------+--------------------------------+
| Grant date | Number of | Exercise | Period exercisable |
| | performance | price | |
| | shares | | |
+------------------------+---------------+--------------+--------------------------------+
| 28th November | 350,000 | GBP0.78 | 28th November 2007 to 28th |
| 2003 - block | | | November 2011 |
+------------------------+---------------+--------------+--------------------------------+
| 15th March 2004 | 450,000 | GBP0.875 | 15th March 2008 to 15th March |
| - block | | | 2012 |
+------------------------+---------------+--------------+--------------------------------+
| 2nd February | 400,000 | GBP0.825 | 2nd February 2009 to 2nd |
| 2005 - block | | | February 2013 |
+------------------------+---------------+--------------+--------------------------------+
| 2nd February | 35,000 | GBP0.825 | 2nd February 2009 |
| 2005 - 4 | | | |
| tranches | | | |
+------------------------+---------------+--------------+--------------------------------+
| 31st January | 35,000 | GBP1.060 | 31st January 2010 |
| 2006 - 4 | | | |
| tranches | | | |
+------------------------+---------------+--------------+--------------------------------+
| 27th February | 75,000 | GBP1.420 | 27th February 2011 to 27th |
| 2007 - block | | | February 2015 |
+------------------------+---------------+--------------+--------------------------------+
| 27th February | 70,000 | GBP1.420 | 27th February 2011 |
| 2007 - 4 | | | |
| tranches | | | |
+------------------------+---------------+--------------+--------------------------------+
Performance shares outstanding at the end of the period have the following
expiry dates and valuations:
+------------------------+------------+----------------+----------+----------+
| Grant date | Number | Expiry date | Value | Value |
| | | | (pence | (GBP) |
| | | | per | |
| | | | share) | |
+------------------------+------------+----------------+----------+----------+
| 28th November | 87,500 | 28th November | 0 | - |
| 2003 | | 2009 | | |
+------------------------+------------+----------------+----------+----------+
| 28th November | 87,500 | 28th November | 0 | - |
| 2003 | | 2010 | | |
+------------------------+------------+----------------+----------+----------+
| 28th November | 87,500 | 28th November | 0 | - |
| 2003 | | 2011 | | |
+------------------------+------------+----------------+----------+----------+
| 28th November | 87,500 | 28th November | 0 | - |
| 2003 | | 2012 | | |
+------------------------+------------+----------------+----------+----------+
| 15th March 2004 | 270,000 | 15th March | 0 | - |
| | | 2009 | | |
+------------------------+------------+----------------+----------+----------+
| 15th March 2004 | 45,000 | 15th March | 0 | - |
| | | 2010 | | |
+------------------------+------------+----------------+----------+----------+
| 15th March 2004 | 45,000 | 15th March | 0 | - |
| | | 2011 | | |
+------------------------+------------+----------------+----------+----------+
| 15th March 2004 | 45,000 | 15th March | 0 | - |
| | | 2012 | | |
+------------------------+------------+----------------+----------+----------+
| 15th March 2004 | 45,000 | 15th March | 0 | - |
| | | 2013 | | |
+------------------------+------------+----------------+----------+----------+
| 2nd February | 275,000 | 2nd February | 0.1 | 240 |
| 2005 | | 2010 | | |
+------------------------+------------+----------------+----------+----------+
| 2nd February | 40,000 | 2nd February | 0.1 | 40 |
| 2005 | | 2011 | | |
+------------------------+------------+----------------+----------+----------+
| 2nd February | 40,000 | 2nd February | 0.1 | 40 |
| 2005 | | 2012 | | |
+------------------------+------------+----------------+----------+----------+
| 2nd February | 40,000 | 2nd February | 0.1 | 40 |
| 2005 | | 2013 | | |
+------------------------+------------+----------------+----------+----------+
| 2nd February | 40,000 | 2nd February | 0.1 | 40 |
| 2005 | | 2014 | | |
+------------------------+------------+----------------+----------+----------+
| 31st January | 35,000 | 31st January | 0 | - |
| 2006 | | 2011 | | |
+------------------------+------------+----------------+----------+----------+
| 27th February | 115,000 | 27th February | 0.1 | 45 |
| 2007 | | 2011 | | |
+------------------------+------------+----------------+----------+----------+
| 27th February | 7,500 | 27th February | 0.1 | 8 |
| 2007 | | 2012 | | |
+------------------------+------------+----------------+----------+----------+
| 27th February | 7,500 | 27th February | 0.1 | 8 |
| 2007 | | 2013 | | |
+------------------------+------------+----------------+----------+----------+
| 27th February | 7,500 | 27th February | 0.1 | 8 |
| 2007 | | 2014 | | |
+------------------------+------------+----------------+----------+----------+
| 27th February | 7,500 | 27th February | 0.1 | 8 |
| 2007 | | 2015 | | |
+------------------------+------------+----------------+----------+----------+
There is no material difference between the actual remaining life and the
contractual remaining life.
The number and weighted average value of performance shares is as follows:
+---------------------+----------+----------+-------------+-----------+----------+----------+-------------+-----------+
| | 52 week period ended 28th December | 52 week period ended 30th December |
| | 2008 | 2007 |
+---------------------+-----------------------------------------------+-----------------------------------------------+
| |Weighted | Value | Number | Charge/ |Weighted | Value | Number | Charge/ |
| | average | in | of | (credit) | average | in | of | (credit) |
| |exercise | pence |performance | and |exercise | pence |performance | and |
| | price | per | shares |liability | price | per | shares |liability |
| | |Binomial | | | |Binomial | | |
| | | Model | | | | Model | | |
+---------------------+----------+----------+-------------+-----------+----------+----------+-------------+-----------+
| | pence | pence | | GBP000 | pence | pence | | GBP000 |
+---------------------+----------+----------+-------------+-----------+----------+----------+-------------+-----------+
| Beginning of the | 86.7 | 1.1 | 2,652,500 | 20 | 81.7 | 55.6 | 2,525,000 | 734 |
| period | | | | | | | | |
+---------------------+----------+----------+-------------+-----------+----------+----------+-------------+-----------+
| Granted during the | - | - | - | - | 142.0 | 26.8 | 290,000 | - |
| period | | | | | | | | |
+---------------------+----------+----------+-------------+-----------+----------+----------+-------------+-----------+
| Exercised during | - | - | - | - | 103.6 | 9.1 | (105,000) | 10 |
| the period | | | | | | | | |
+---------------------+----------+----------+-------------+-----------+----------+----------+-------------+-----------+
| Lapsed during the | | - | (1,237,500) | - | 136.5 | - | (57,500) | - |
| period | | | | | | | | |
+---------------------+----------+----------+-------------+-----------+----------+----------+-------------+-----------+
| Change in fair | - | - | - | (20) | - | - | - | (724) |
| value (spread) | | | | | | | | |
+---------------------+----------+----------+-------------+-----------+----------+----------+-------------+-----------+
| Outstanding at the | 89.7 | 0.03 | 1,415,000 | - | 86.7 | 1.1 | 2,652,500 | 20 |
| end of the period | | | | | | | | |
+---------------------+----------+----------+-------------+-----------+----------+----------+-------------+-----------+
| Exercisable at the | 85.2 | - | 357,500 | - | 82.0 | - | 1,007,500 | - |
| end of the period | | | | | | | | |
+---------------------+----------+----------+-------------+-----------+----------+----------+-------------+-----------+
The change in fair value in the period is spread over the period to first
exercise date of each tranche of performance shares, representing the period
over which the benefit of the shares is being earned.
The fair value of services received in return for performance shares granted is
measured by reference to the fair value of the performance share granted. The
estimate of the fair value of the services received is measured based on the
Binomial Model. The contractual life of the performance share is used as an
input into this model. Expectations of exercise are also incorporated into the
model.
In valuing the performance shares, it has been assumed that 10% of the shares
will lapse before reaching the exercise date.
+------------------------------------------------------+---------------+------------+
| Key assumptions in the Binomial Model used |28th December | 30th |
| | 2008 | December |
| | | 2007 |
+------------------------------------------------------+---------------+------------+
| | | |
+------------------------------------------------------+---------------+------------+
| | | |
+------------------------------------------------------+---------------+------------+
| Fair value at measurement date | GBP0.0003 | GBP0.011 |
+------------------------------------------------------+---------------+------------+
| | | |
+------------------------------------------------------+---------------+------------+
| Share price at measurement date | GBP0.155 | GBP0.48 |
+------------------------------------------------------+---------------+------------+
| Expected volatility (expressed as weighted average | 42%-84% | 33%-68% |
| volatility used in | | |
| the modelling under Binomial model) | | |
+------------------------------------------------------+---------------+------------+
| Option life (expressed as weighted average life used | 0.2-6.7 | 0.4-7.7 |
| in the | years | years |
| modelling under the Binomial model) | | |
+------------------------------------------------------+---------------+------------+
| Expected dividends | - | - |
+------------------------------------------------------+---------------+------------+
| Risk-free interest rate | 0.6% to | 4.4%-4.8% |
| | 3.1% | |
+------------------------------------------------------+---------------+------------+
The expected volatility is based on the historic volatility (calculated with
reference to the weighted average remaining life of the performance shares at
the reporting date).
Performance shares are granted under a service condition. Such conditions are
not taken into account in the grant date fair value measurement of the services
received. There are no market conditions associated with the performance share
grants.
10 Result attributable to Georgica PLC
The financial statements of the parent company, Georgica PLC, were approved by
the board of directors on 9th March 2009. The result for the financial period
dealt with in the financial statements of Georgica PLC was a loss of GBP54.5m
(2007: profit of GBP11.8m). As permitted by Section 230 of the Companies Act
1985, no separate Income Statement is presented in respect of the parent
company.
11 Goodwill and intangible assets
+----------------------------------+-----------+-----------+------------+-----------+
| Group | Goodwill | Software | Trademarks | Total |
+----------------------------------+-----------+-----------+------------+-----------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+----------------------------------+-----------+-----------+------------+-----------+
| Cost | | | | |
+----------------------------------+-----------+-----------+------------+-----------+
| At 1st January 2007 | 82,252 | 420 | 75 | 82,747 |
+----------------------------------+-----------+-----------+------------+-----------+
| Additions | 3,114 | 451 | - | 3,565 |
+----------------------------------+-----------+-----------+------------+-----------+
| Disposals* | (40,611) | (283) | (75) | (40,969) |
+----------------------------------+-----------+-----------+------------+-----------+
| At 30th December 2007 | 44,755 | 588 | - | 45,343 |
+----------------------------------+-----------+-----------+------------+-----------+
| Additions | - | 1,909 | - | 1,909 |
+----------------------------------+-----------+-----------+------------+-----------+
| Disposals | (195) | - | - | (195) |
+----------------------------------+-----------+-----------+------------+-----------+
| At 28th December 2008 | 44,560 | 2,497 | - | 47,057 |
+----------------------------------+-----------+-----------+------------+-----------+
| | | | | |
+----------------------------------+-----------+-----------+------------+-----------+
| Amortisation and impairment | | | | |
| losses | | | | |
+----------------------------------+-----------+-----------+------------+-----------+
| At 1st January 2007 | 1,150 | 383 | 50 | 1,583 |
+----------------------------------+-----------+-----------+------------+-----------+
| Charge for the period - | - | 164 | 13 | 177 |
| amortisation | | | | |
+----------------------------------+-----------+-----------+------------+-----------+
| Impairment losses | 1,967 | - | - | 1,967 |
+----------------------------------+-----------+-----------+------------+-----------+
| Disposals* | (990) | (83) | (63) | (1,136) |
+----------------------------------+-----------+-----------+------------+-----------+
| At 30th December 2007 | 2,127 | 464 | - | 2,591 |
+----------------------------------+-----------+-----------+------------+-----------+
| Charge for the period - | - | 548 | - | 548 |
| amortisation | | | | |
+----------------------------------+-----------+-----------+------------+-----------+
| Impairment losses | 26,772 | 787 | - | 27,559 |
+----------------------------------+-----------+-----------+------------+-----------+
| At 28th December 2008 | 28,899 | 1,799 | - | 30,698 |
+----------------------------------+-----------+-----------+------------+-----------+
| | | | | |
+----------------------------------+-----------+-----------+------------+-----------+
| Net book value | | | | |
+----------------------------------+-----------+-----------+------------+-----------+
| At 28th December 2008 | 15,661 | 698 | - | 16,359 |
+----------------------------------+-----------+-----------+------------+-----------+
| At 30th December 2007 | 42,628 | 124 | - | 42,752 |
+----------------------------------+-----------+-----------+------------+-----------+
| At 1st January 2007 | 81,102 | 37 | 25 | 81,164 |
+----------------------------------+-----------+-----------+------------+-----------+
* The cost and amortisation of goodwill disposals have been restated by
GBP3,972,000 in the 52 weeks to 30th December 2007 to show the write-off of
goodwill on the sale of Tenpin bowls for redevelopment as an adjustment to the
cost of goodwill. The GBP990,000 balance remaining in disposals in 2007
comprises the reversal of previous impairments recorded against the goodwill on
Rileys Limited properties on the disposal of Rileys Limited.
Goodwill additions in 2007 are set out in note 15. The amortisation and
impairment charges are recognised in administrative expenses in the income
statement.
Impairment loss
Goodwill has been allocated to cash generating units and is summarised by
business segment as follows:
+---------------------------------+--------------+------------+------------+----------+
| | 28th | 28th | 30th | 30th |
| | December | December | December |December |
| | 2008 | 2008 | 2007 | 2007 |
+---------------------------------+--------------+------------+------------+----------+
| | Tenpin | Rileys | Tenpin | Rileys |
+---------------------------------+--------------+------------+------------+----------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+---------------------------------+--------------+------------+------------+----------+
| Goodwill at the period end | 15,661 | - | 42,628 | - |
+---------------------------------+--------------+------------+------------+----------+
| Impairment of goodwill recorded | 26,772 | - | 1,837 | 130 |
| in the period | | | | |
+---------------------------------+--------------+------------+------------+----------+
The recoverable amount of each cash generating unit has been calculated as the
higher of its value in use and its fair value less cost to sell. The
calculations of value in use are based on pre-tax cash flow projections from the
financial budgets approved by the board covering a two to three year period.
Cash flows beyond this two to three year period are extrapolated over the life
of the lease relating to that site, extended by 15 years for short leasehold
premises in England and Wales where the provisions of the Landlord and Tenants
Act apply and the company has the right and expects to extend the lease on
expiry, or over 50 years for a long leasehold or freehold site.
The key features of this calculation are shown below:
+-----------------------------------------------------+-------------+-------------+
| | 28th | 30 December |
| | December | 2007 |
| | 2008 | |
+-----------------------------------------------------+-------------+-------------+
| | | |
+-----------------------------------------------------+-------------+-------------+
| Period on which management approved forecasts are | 2 to 3 | 2 to 3 |
| based | years | years |
+-----------------------------------------------------+-------------+-------------+
| Growth rate applied beyond approved forecast period | 2% | 0% |
+-----------------------------------------------------+-------------+-------------+
| Pre-tax discount rate | 13% | 7% |
+-----------------------------------------------------+-------------+-------------+
The budgets which underlie the calculations are compiled on a site by site
basis, with gross margin, staff cost, property cost and other operating profit
assumptions being based on past performance and known factors specific to that
site which are expected by management to affect future performance, to reflect
the operating circumstances and risks relevant to each part of the
business. They also include an allocation of central overheads which are
allocated evenly across the sites. The pre-tax discount rate applied to the cash
flow projections approximates the group's weighted average cost of capital,
adjusted only to reflect the way in which the market would assess the specific
risks associated with the estimated cash flows of the bowling businesses and to
exclude any risks that are not relevant to estimated cash flows of the bowling
businesses, or for which they have already been adjusted. The pre-tax discount
rate applied has increased since 2007 to 13% as the market risk premium has
risen substantially since 2007, there is now a significant liquidity premium
being applied to small AIM listed companies such as Georgica and there is deemed
to be a greater risk of volatility in the sales of each bowling business. This
pre-tax discount rate has been benchmarked against the discount rates applied by
other companies in the leisure sector.
The key assumption to which the calculation is sensitive remains the future
trading performance expected of each bowl, which has a more significant effect
than the discount or growth rates assumed. If the sales in the budgets which
underlie the calculations are reduced by 5%, reducing the cash flows of the
bowls by the sales reduction converting to cash at 79% (the average conversion
achieved by Tenpin), the indicated impairment charge increases by GBP10.6m. If
the pre-tax discount rate applied in the calculations is increased by 5%, the
indicated impairment charge increases by GBP8.6m.
For the calculation of fair value less cost to sell, management have assumed
that each Tenpin business could be sold for a multiple of 5.0 x EBITDA (2007:
5.75x EBITDA). This change in assumption is also driven by the market's current
valuation of bowling businesses.
12 Investment property
At 30th December 2007 the group held the freehold property interest in 8 cue
sports clubs leased to Rileys Limited, classified as current assets held for
resale as the properties were being marketed for sale and there was a strong
market for them. During Q1 2008 two of the properties, at Pontefract and
Westcliff, were sold for proceeds of GBP2.3m. The interest in the remaining 6
properties has been reclassified to investment properties as at 28th December
2008 because, although they are still being marketed for sale there is no longer
a strong market for them.
+-------------------------------------+------------+------------+------------+------------+
| | 28th | 30th | 28th | 30th |
| | December | December | December | December |
| | 2008 | 2007 | 2008 | 2007 |
+-------------------------------------+------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+-------------------------------------+------------+------------+------------+------------+
| Investment properties brought | - | - | - | - |
| forward | | | | |
+-------------------------------------+------------+------------+------------+------------+
| Transfers from current assets held | 3,606 | - | - | - |
| for resale | | | | |
+-------------------------------------+------------+------------+------------+------------+
| Revaluation | (437) | - | - | - |
+-------------------------------------+------------+------------+------------+------------+
| Investment properties carried | 3,169 | - | - | - |
| forward | | | | |
+-------------------------------------+------------+------------+------------+------------+
The properties were transferred to investment properties at carrying value as at
28th December 2008, and were revalued to fair value resulting in a loss on
revaluation of GBP437,000 being charged to administrative expenses. The
valuation of GBP3,169,000 as at 28th December 2008 was made by the directors
based on a valuation performed by the group's property advisors, Fletcher King,
which was a "Market value" valuation supported by market evidence. This expert
valuation (which does not represent an independent professional valuation) was
adjusted only to reflect an increase in rental income contracted from 2012. The
rental income received from these properties in the period was GBP233,000 (2007:
GBP66,000).
13 Investments
+-----------------------------------------------------+----------+----------+----------+
| | Subsidiaries |
+-----------------------------------------------------+--------------------------------+
| Company | Shares | Loans | Total |
| | GBP000 | GBP000 | GBP000 |
+-----------------------------------------------------+----------+----------+----------+
| Cost | | | |
+-----------------------------------------------------+----------+----------+----------+
| At 1st January 2007 | 41,965 | 28,111 | 70,076 |
+-----------------------------------------------------+----------+----------+----------+
| Additions | 221,869 | 2,192 | 224,061 |
+-----------------------------------------------------+----------+----------+----------+
| Repayment | - | (30,303) | (30,303) |
+-----------------------------------------------------+----------+----------+----------+
| Impairments | (95,373) | - | (95,373) |
+-----------------------------------------------------+----------+----------+----------+
| At 30th December 2007 | 168,461 | - | 168,461 |
+-----------------------------------------------------+----------+----------+----------+
| Impairments | (61,712) | - | (61,712) |
+-----------------------------------------------------+----------+----------+----------+
| At 28th December 2008 | 106,749 | - | 106,749 |
+-----------------------------------------------------+----------+----------+----------+
Impairments in 2008 relate to the impairment in value of the company's
investment in Tenpin Limited (GBP37.9m), in Georgica Holdings Limited (GBP9.3m)
and to the receipt of liquidation dividends from 3 subsidiary companies formerly
in members' voluntary liquidation, and in a dissolution process as at 28th
December 2008 (GBP14.5m). The impairment of the investment in shares in Tenpin
Limited was required as the net assets of that subsidiary were reduced during
the period by impairments of goodwill and intangible assets and property, plant
and equipment totalling GBP39.0m and further onerous lease provisions of
GBP7.0m. The impairment of the investment in Georgica Holdings Limited was
required as the net assets of Georgica Holdings Limited were reduced by losses
arising on the sale of Pontefract and Westcliff and by the revaluation of the
remaining 6 properties held as investment properties (in the balance sheet of
Georgica Holdings Limited these properties were held at fair value on the date
they were acquired from Rileys Limited in an intra group transaction, which
valuation was significantly higher than the carrying value at which they were
held in the group balance sheet or the current valuation of the 6 remaining
properties). These impairments and revaluation write downs were charged to
administrative expenses in the income statement of the relevant subsidiary.
Impairments in 2007 arose on receipt of dividends from directly held
subsidiaries. Additions to investments in shares in 2007 related to the
acquisition by Georgica PLC of the entire issued share capital of Tenpin Group
Limited and Tenpin Limited, both acquired from other subsidiaries of Georgica
PLC.
Principal group investments
The parent company has investments in the following subsidiary undertakings,
which principally affected the results and net assets of the group. Details of
investments which are not significant have been omitted.
+---------------------------------------+--------------+---------------+---------------+------------+
| | Country of | Country | Principal |Percentage |
| |registration | of | activity | of |
| | |incorporation | | ordinary |
| | |and operation | | shares |
| | | | | held |
+---------------------------------------+--------------+---------------+---------------+------------+
| Companies directly owned by Georgica | | | | |
| PLC | | | | |
+---------------------------------------+--------------+---------------+---------------+------------+
| Georgica Holdings Limited | England & | Great | Holding | 100% |
| | Wales | Britain | Company | |
+---------------------------------------+--------------+---------------+---------------+------------+
| Tenpin Limited | England & | Great | Bowling | 100% |
| | Wales | Britain | | |
+---------------------------------------+--------------+---------------+---------------+------------+
| Georgica Share Incentive Plan Limited | England & | Great | Share | 100% |
| | Wales | Britain | Incentive | |
| | | | Plan | |
+---------------------------------------+--------------+---------------+---------------+------------+
| | | | | |
+---------------------------------------+--------------+---------------+---------------+------------+
| Companies owned indirectly by | | | | |
| Georgica PLC | | | | |
+---------------------------------------+--------------+---------------+---------------+------------+
| GNU 2 Limited * (formerly Georgica | England & | Great | Non trading | 100% |
| New Unit 2 Limited) | Wales | Britain | | |
+---------------------------------------+--------------+---------------+---------------+------------+
| Georgica (Lewisham) Limited * | England & | Great | Non trading | 100% |
| | Wales | Britain | | |
+---------------------------------------+--------------+---------------+---------------+------------+
| GNU 4 Limited * (formerly Georgica | England & | Great | Non trading | 100% |
| New Unit 4 Limited) | Wales | Britain | | |
+---------------------------------------+--------------+---------------+---------------+------------+
| GNU 5 Limited * (formerly Georgica | England & | Great | Non trading | 100% |
| New Unit 5 Limited) | Wales | Britain | | |
+---------------------------------------+--------------+---------------+---------------+------------+
| TPNU 1 Limited ** (formerly Tenpin | England & | Great | Non trading | 100% |
| (Ashford) Limited) | Wales | Britain | | |
+---------------------------------------+--------------+---------------+---------------+------------+
| Tenpin Sunderland Limited ** | England & | Great | Bowling | 100% |
| | Wales | Britain | | |
+---------------------------------------+--------------+---------------+---------------+------------+
| Tenpin Halifax Limited ** | England & | Great | Non trading | 100% |
| | Wales | Britain | | |
+---------------------------------------+--------------+---------------+---------------+------------+
| Tenpin (Widnes) Limited ** | England & | Great | Non trading | 100% |
| | Wales | Britain | | |
+---------------------------------------+--------------+---------------+---------------+------------+
| TPNU 4 Limited ** (formerly Tenpin | England & | Great | Non trading | 100% |
| New Unit 4 Limited) | Wales | Britain | | |
+---------------------------------------+--------------+---------------+---------------+------------+
* These companies are all directly held subsidiaries of Georgica Holdings
Limited.
** These companies are all directly held subsidiaries of Tenpin Limited.
Rileys Limited and its subsidiary undertakings were sold on 28th August 2007
(see note 8).
Nine group companies were placed into members' voluntary liquidation in October
2007, following a group reorganisation to simplify the group structure. These
comprised Georgica Leisure PLC, Georgica Bowling Limited, Georgica Franchises
Limited, Georgica Realisations Limited, Tenpin Group Limited, Tenpin Finance
Limited, Megabowl Group Limited, Megabowl Services (CI) Limited and Pondtrail
Limited. The liquidators have ceased to act and these companies are in the
process of being dissolved.
14 Property, plant and equipment
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| Group | Freehold | Long | Short |Fixtures, | Total |
| | land and |leasehold |leasehold | fittings | |
| |buildings | premises | premises | and | |
| | | | |equipment | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| Cost | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| At 1st January 2007 | 29,909 | 20,994 | 40,522 | 71,430 | 162,855 |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| Additions | 669 | 73 | 3,611 | 6,315 | 10,668 |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| Transfer to assets | (4,846) | - | - | - | (4,846) |
| held for resale | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| Disposals | (25,732) | (13,743) | (22,648) | (37,948) | (100,071) |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| At 30th December 2007 | - | 7,324 | 21,485 | 39,797 | 68,606 |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| Additions | - | 40 | 3,636 | 1,348 | 5,024 |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| Disposals | - | (1,339) | (166) | (1,002) | (2,507) |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| At 28th December 2008 | - | 6,025 | 24,955 | 40,143 | 71,123 |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| Depreciation and | | | | | |
| impairment | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| At 1st January 2007 | 2,411 | 2,637 | 9,704 | 28,453 | 43,205 |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| Charge for the period | 432 | 379 | 1,348 | 5,403 | 7,562 |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| Transfer to assets | (383) | - | - | - | (383) |
| held for resale | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| Disposals | (2,460) | (1,706) | (4,010) | (20,678) | (28,854) |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| Impairment | - | - | - | 1,412 | 1,412 |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| At 30th December 2007 | - | 1,310 | 7,042 | 14,590 | 22,942 |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| Charge for the period | - | 209 | 504 | 3,211 | 3,924 |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| Disposals | - | (208) | (23) | (311) | (542) |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| Impairment | - | 1,439 | 6,209 | 3,812 | 11,460 |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| At 28th December 2008 | - | 2,750 | 13,732 | 21,302 | 37,784 |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| Net book value | | | | | |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| At 28th December 2008 | - | 3,275 | 11,223 | 18,841 | 33,339 |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| At 30th December 2007 | - | 6,014 | 14,443 | 25,207 | 45,664 |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
| At 1st January 2007 | 27,498 | 18,357 | 30,818 | 42,977 | 119,650 |
+-----------------------+-----------+-----------+-----------+-----------+-----------+
Bank borrowings are secured on property, plant and equipment for the value of
GBP6,362,000 (2007: GBP4,800,000).
Properties held under finance leases had a property net book value of GBP3.3m
(2007: GBP5.0m) and the finance lease depreciation charged in the period was
GBP104,000 (2007: GBP124,000).
Impairment has been assessed on a consistent basis with impairment of goodwill,
using the approach and assumptions detailed in note 11. An impairment charge of
GBP11.5m (2007: GBP1.4m) was charged in the period.
Disposals in 2008 comprise the sale and leaseback of Stoke bowl, the sale of
Cardiff bowl for redevelopment and the closure of bowls in Edinburgh and
Gateshead. Disposals in 2007 principally comprise the sale of Rileys Limited,
the sale and leaseback of 9 Tenpin freehold and long leasehold properties and
the sale of a bowl in Plymouth for redevelopment.
+--------------------------------------------------------+-------------+------------+
| | Fixtures, | Total |
| | fittings | |
| | and | |
| | equipment | |
+--------------------------------------------------------+-------------+------------+
| Company | GBP000 | GBP000 |
+--------------------------------------------------------+-------------+------------+
| Cost | | |
+--------------------------------------------------------+-------------+------------+
| At 1st January 2007 | 1,001 | 1,001 |
+--------------------------------------------------------+-------------+------------+
| Additions | 15 | 15 |
+--------------------------------------------------------+-------------+------------+
| At 30th December 2007 | 1,016 | 1,016 |
+--------------------------------------------------------+-------------+------------+
| Additions | 5 | 5 |
+--------------------------------------------------------+-------------+------------+
| Disposals | (16) | (16) |
+--------------------------------------------------------+-------------+------------+
| At 28th December 2008 | 1,005 | 1,005 |
+--------------------------------------------------------+-------------+------------+
| | | |
+--------------------------------------------------------+-------------+------------+
| Depreciation | | |
+--------------------------------------------------------+-------------+------------+
| At 1st January 2007 | 429 | 429 |
+--------------------------------------------------------+-------------+------------+
| Charge for the period | 99 | 99 |
+--------------------------------------------------------+-------------+------------+
| At 30th December 2007 | 528 | 528 |
+--------------------------------------------------------+-------------+------------+
| Charge for the period | 64 | 64 |
+--------------------------------------------------------+-------------+------------+
| At 28th December 2008 | 592 | 592 |
+--------------------------------------------------------+-------------+------------+
| | | |
+--------------------------------------------------------+-------------+------------+
| Net book value | | |
+--------------------------------------------------------+-------------+------------+
| At 28th December 2008 | 413 | 413 |
+--------------------------------------------------------+-------------+------------+
| At 30th December 2007 | 488 | 488 |
+--------------------------------------------------------+-------------+------------+
| At 1st January 2007 | 572 | 572 |
+--------------------------------------------------------+-------------+------------+
15 Acquisition of trade and assets
There were no trade and asset acquisitions in the 52 week period ended 28th
December 2008. In the 52 week period ended 30th December 2007 the group acquired
the trade and assets of a bowl in Grantham as a going concern for cash and
acquired 4 cue sports clubs in Scotland (which were acquired through the
acquisition of 100% of the ordinary share capital of 3 companies and were
subsequently disposed of with Rileys Limited in August 2007) as going concerns
for cash. Goodwill of GBP3,114,000 was recognised on these acquisitions.
16 Inventories
+-------------------------------------+---------------+------------+------------+------------+
| | Group | Group | Company | Company |
+-------------------------------------+---------------+------------+------------+------------+
| |28th December | 30th | 28th | 30th |
| | 2008 | December | December | December |
| | | 2007 | 2008 | 2007 |
+-------------------------------------+---------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+-------------------------------------+---------------+------------+------------+------------+
| Goods held for resale | 1,755 | 1,596 | - | - |
+-------------------------------------+---------------+------------+------------+------------+
17 Trade and other receivables
+-------------------------------------+------------+------------+------------+------------+
| | Group | Group | Company | Company |
+-------------------------------------+------------+------------+------------+------------+
| | 28th | 30th | 28th | 30th |
| | December | December | December | December |
| | 2008 | 2007 | 2008 | 2007 |
+-------------------------------------+------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+-------------------------------------+------------+------------+------------+------------+
| Trade receivables | 255 | - | - | - |
+-------------------------------------+------------+------------+------------+------------+
| Amounts owed by subsidiary | - | - | - | 535 |
| undertakings | | | | |
+-------------------------------------+------------+------------+------------+------------+
| Other receivables | 3,126 | 2,279 | 566 | 422 |
+-------------------------------------+------------+------------+------------+------------+
| Prepayments and accrued income | 3,883 | 4,388 | 87 | 153 |
+-------------------------------------+------------+------------+------------+------------+
| | 7,264 | 6,667 | 653 | 1,110 |
+-------------------------------------+------------+------------+------------+------------+
Amounts owed by subsidiary undertakings were loaned at the group's average
borrowing rate, being commercial loans repayable on demand.
18 Assets held for resale
Assets held for resale of GBP4.5m as at 30th December 2007 comprised the
freehold or long leasehold property interest in 8 cue sports clubs leased to
Rileys Limited, held at carrying value equivalent to cost less accumulated
depreciation. During 2008 the group sold two of these properties and continues
to seek planning consent and/or buyers for the remainder. However, as the
property market is relatively inactive the remaining property interests have
been reclassified to Investment Properties in Non-current assets as they no
longer meet the criteria for current assets held for resale (see note 12).
19 Financial assets
+-------------------------------------+------------+------------+------------+------------+
| | Group | Group | Company | Company |
+-------------------------------------+------------+------------+------------+------------+
| | 28th | 30th | 28th | 30th |
| | December | December | December | December |
| | 2008 | 2007 | 2008 | 2007 |
+-------------------------------------+------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+-------------------------------------+------------+------------+------------+------------+
| Interest receivable | 7 | 21 | 7 | - |
+-------------------------------------+------------+------------+------------+------------+
| Interest rate cap | 13 | 191 | 13 | 191 |
+-------------------------------------+------------+------------+------------+------------+
| Interest rate swap | - | 48 | - | 48 |
+-------------------------------------+------------+------------+------------+------------+
| | 20 | 260 | 20 | 239 |
+-------------------------------------+------------+------------+------------+------------+
On 4th July 2008 GBP85m in value of the GBP100m interest rate cap was sold for
cash proceeds of GBP510,000, leaving an interest rate cap in place of GBP15m.
20 Cash and cash equivalents
+-------------------------------------+------------+------------+------------+------------+
| | Group | Group | Company | Company |
+-------------------------------------+------------+------------+------------+------------+
| | 28th | 30th | 28th | 30th |
| | December | December | December | December |
| | 2008 | 2007 | 2008 | 2007 |
+-------------------------------------+------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+-------------------------------------+------------+------------+------------+------------+
| Cash at bank and on hand | 2,340 | 528 | - | - |
+-------------------------------------+------------+------------+------------+------------+
| Short term bank deposits | 46 | 188 | 46 | 188 |
+-------------------------------------+------------+------------+------------+------------+
| Cash and cash equivalents | 2,386 | 716 | 46 | 188 |
+-------------------------------------+------------+------------+------------+------------+
| | | | | |
+-------------------------------------+------------+------------+------------+------------+
| Overdrafts | - | (545) | (1,488) | (938) |
+-------------------------------------+------------+------------+------------+------------+
| Cash, cash equivalents and bank | 2,386 | 171 | (1,442) | (750) |
| overdrafts as reported in the cash | | | | |
| flow statement | | | | |
+-------------------------------------+------------+------------+------------+------------+
21 Share capital
+-----------------------------------------------+----+-----+------+-----+-----+----------+
| Group and Company | | | 28th | 30th |
| | | | December |December |
| | | | 2008 | 2007 |
+-----------------------------------------------+----+------------+-----------+----------+
| | | | GBP000 | GBP000 |
+-----------------------------------------------+----+------------+-----------+----------+
| Authorised share capital | | | | |
+-----------------------------------------------+----+------------+-----------+----------+
| 130,000,000 (2007:130,000,000) ordinary | | | 6,500 | 6,500 |
| shares of 5p each | | | | |
+-----------------------------------------------+----+------------+-----------+----------+
| 2,538,075 (2007:2,538,075) convertible | | | 1,269 | 1,269 |
| ordinary shares of 50p each | | | | |
+-----------------------------------------------+----+------------+-----------+----------+
| | | | 7,769 | 7,769 |
+-----------------------------------------------+----+------------+-----------+----------+
| Allotted, called up and fully paid share | | | | |
| capital | | | | |
+-----------------------------------------------+----+------------+-----------+----------+
| 97,422,700 (2007:97,422,700) ordinary shares | | | 4,871 | 4,871 |
| of 5p each | | | | |
+-----------------------------------------------+----+------------+-----------+----------+
| 2,538,075 (2007:2,538,075) convertible | | | 1,269 | 1,269 |
| ordinary shares of 50p each | | | | |
+-----------------------------------------------+----+------------+-----------+----------+
| | | | 6,140 | 6,140 |
+-----------------------------------------------+----+------------+-----------+----------+
| | Number | GBP000 |
+----------------------------------------------------------+------------+----------------+
| Movements in ordinary shares | | |
+----------------------------------------------------------+------------+----------------+
| At 1st January 2007, 30th December 2007 and 28th | 97,422,700 | 4,871 |
| December 2008 | | |
+-----------------------------------------------+----+-----+------+-----+-----+----------+
The company purchased no shares for cancellation in the period (2007: none).
The convertible ordinary shares are freely transferable and can be converted
into ordinary shares at the prevailing conversion rate at any time. The rate of
conversion varies according to a conversion rate formula or if certain other
events occur as specified in the company's Articles of Association. The main
factor affecting the conversion rate is future increases in Georgica's share
price. The shares will convert automatically on the share price reaching GBP4 or
on 9th October 2010 if earlier, at the conversion rate then applicable.
The maximum rate of conversion, subject to necessary adjustments resulting from
a change in the capital structure of Georgica, is currently 4.0 ordinary shares
for 1 convertible ordinary share. Based upon the share price at 28th December
2008 the rate of conversion was 2.181818 (2007: 2.181818) ordinary shares for 1
convertible ordinary share. The rights and benefits attaching to each
convertible ordinary share at 28th December 2008 were equivalent to those
attaching to 2.181818 (2007: 2.181818) ordinary shares.
22 Earnings per share
Basic earnings per share for each period is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average number of ordinary
shares in issue during the period, including convertible ordinary shares which
are converted at the conversion rate applicable at each period end.
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to reflect the impact of all dilutive potential ordinary
shares. The potential dilutive effects of the shares held by the Georgica Share
Incentive Plan Limited are set out below. The group's incentive schemes,
although based on share price movements, will all be cash settled and so are not
dilutive.
Details of the earnings and weighted average number of ordinary shares used in
each calculation are set out below.
+----------------------------------------------------------+--+--+---+-------------+-------------+
| | | | | 52 weeks | 52 weeks |
| | | | | to 28th | to 30th |
| | | | | December | December |
| | | | | 2008 | 2007 |
+----------------------------------------------------------+--+--+---+-------------+-------------+
| | | | | GBP000 | GBP000 |
+----------------------------------------------------------+--+--+---+-------------+-------------+
| | | | | | |
+----------------------------------------------------------+--+--+---+-------------+-------------+
| Earnings attributable to ordinary shareholders - | | | | (39,122) | 8,553 |
| continuing operations | | | | | |
+----------------------------------------------------------+--+--+---+-------------+-------------+
| | | | | | |
+----------------------------------------------------------+--+--+---+-------------+-------------+
| Earnings attributable to ordinary shareholders - | | | | - | (18,975) |
| discontinued operations | | | | | |
+----------------------------------------------------------+--+--+---+-------------+-------------+
| | | | | | |
+----------------------------------------------------------+--+--+---+-------------+-------------+
| Earnings attributable to ordinary shareholders | | | | (39,122) | (10,422) |
+----------------------------------------------------------+--+--+---+-------------+-------------+
| | |
+----------------------------------------------------------+-------------------------------------+
| | Number of shares |
+----------------------------------------------------------+-------------------------------------+
| Weighted average number of ordinary shares: | | | | | |
+----------------------------------------------------------+--+--+---+-------------+-------------+
| For basic earnings per share | | | | 102,793,771 | 102,799,604 |
+----------------------------------------------------------+--+--+---+-------------+-------------+
| Effect of shares held by the Georgica Share Incentive | | | | 166,547 | 160,714 |
| Plan | | | | | |
+----------------------------------------------------------+--+--+---+-------------+-------------+
| For diluted earnings per share | | | | 102,960,318 | 102,960,318 |
+----------------------------------------------------------+--+--+---+-------------+-------------+
| Effective number of ordinary shares in issue at the | | | | 107,575,000 | 107,575,000 |
| period end, assuming maximum conversion of convertible | | | | | |
| shares | | | | | |
+----------------------------------------------------------+--+--+---+-------------+-------------+
| | Pence per share |
+----------------------------------------------------------+-------------------------------------+
| Basic earnings per share - continuing | | | | (38.1)p | 8.3p |
+----------------------------------------------------------+--+--+---+-------------+-------------+
| Diluted earnings per share - continuing | | | | (38.1)p | 8.3p |
+----------------------------------------------------------+--+--+---+-------------+-------------+
| | | | | | |
+----------------------------------------------------------+--+--+---+-------------+-------------+
| Basic earnings per share - discontinued | | | | - | (18.4)p |
+----------------------------------------------------------+--+--+---+-------------+-------------+
| Diluted earnings per share - discontinued | | | | - | (18.4)p |
+----------------------------------------------------------+--+--+---+-------------+-------------+
| | |
+----------------------------------------------------------+-------------------------------------+
| Basic earnings per share | | | | (38.1)p | (10.1)p |
+----------------------------------------------------------+--+--+---+-------------+-------------+
| Diluted earnings per share | | | | (38.1)p | (10.1)p |
+----------------------------------------------------------+--+--+---+-------------+-------------+
The weighted average number of shares includes convertible ordinary shares which
convert to ordinary shares based upon changes in the ordinary share price or if
certain other events occur as specified in the company's Articles of
Association.
For the purposes of calculating the weighted average number of shares for basic
earnings per share the ratio of conversion for the convertible ordinary shares
was 2.181818 (2007: 2.181818) ordinary shares for each convertible share. This
was the rate at which the shares could have been converted on 28th December 2008
had the option been exercised. The rights and benefits attaching to each
convertible ordinary share at 28th December 2008 were equivalent to those
attaching to 2.181818 (2007: 2.181818) ordinary shares.
For diluted earnings per share the ratio of conversion for the convertible
ordinary shares was also 2.181818 (2007: 2.181818) ordinary shares for each
convertible ordinary share. Based upon the share price at 28th December
2008 this was the maximum rate the shares could be converted at in the future
based upon the passage of time. Consequently, the convertible ordinary shares
did not have a dilutive effect on earnings per share in 2008 or 2007.
The maximum rate of conversion, subject to necessary adjustments resulting from
a change in the capital structure of Georgica, is currently 4.0 ordinary shares
for 1 convertible ordinary share. The convertible ordinary shares will also
convert at the rate of 4.0 ordinary shares for 1 convertible ordinary share in
the event that an offer for the company is posted.
The Georgica Share Incentive Plan Limited acquired 5,383 (2007:7,229) ordinary
shares in the period to be offered as "matching" or "free" shares to members of
the plan. The effect of these shares, together with the "matching" or "free"
shares issued in previous years, on earnings per share in 2008 and 2007 is shown
above.
23 Cash generated from operations
+----------------------------------------+----------+----------+----------+----------+
| | Group | Company |
+----------------------------------------+---------------------+---------------------+
| |52 weeks |52 weeks |52 weeks |52 weeks |
| | to 28th | to 30th | to 28th | to 30th |
| |December |December |December |December |
| | 2008 | 2007 | 2008 | 2007 |
+----------------------------------------+----------+----------+----------+----------+
| Cash flows from operating activities | GBP000 | GBP000 | GBP000 | GBP000 |
+----------------------------------------+----------+----------+----------+----------+
| (Loss)/profit for the period - | (39,122) | 8,553 | (54,515) | (27,046) |
| continuing operations | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Adjustments for: | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Tax | (5,377) | (1,392) | - | - |
+----------------------------------------+----------+----------+----------+----------+
| Interest income | (571) | (252) | (560) | (3,283) |
+----------------------------------------+----------+----------+----------+----------+
| Interest expense and finance charges | 1,502 | 16,211 | 4,971 | 23,947 |
+----------------------------------------+----------+----------+----------+----------+
| Impairment of property, plant and | 11,460 | 1,412 | - | - |
| equipment | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Impairment of goodwill | 26,772 | 1,837 | - | - |
+----------------------------------------+----------+----------+----------+----------+
| Impairment of investment in | - | - | 47,199 | - |
| subsidiaries | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Impairment of intangible assets | 787 | - | - | - |
+----------------------------------------+----------+----------+----------+----------+
| Depreciation and amortisation of | 548 | 164 | - | - |
| intangible assets | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Depreciation | 3,924 | 4,027 | 64 | 100 |
+----------------------------------------+----------+----------+----------+----------+
| Revaluation of investment properties | 437 | - | - | - |
+----------------------------------------+----------+----------+----------+----------+
| Profit on disposal | (3,412) | (26,260) | - | 1,016 |
+----------------------------------------+----------+----------+----------+----------+
| Changes in working capital: | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Increase in inventories | (159) | (20) | - | - |
+----------------------------------------+----------+----------+----------+----------+
| (Increase)/ decrease in trade and | (94) | (1,222) | 457 | 165 |
| other receivables | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Increase/ (decrease) in payables* | (57) | 2,183 | (1,165) | (304) |
+----------------------------------------+----------+----------+----------+----------+
| Increase/ (decrease) in provisions | 6,867 | 986 | - | (44) |
+----------------------------------------+----------+----------+----------+----------+
| Cash generated from/ (used in) | 3,505 | 6,227 | (3,549) | (5,449) |
| continuing operations | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Loss for the period - discontinued | - | (18,975) | - | - |
| operations | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Adjustments for: | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Tax | - | 5,294 | - | - |
+----------------------------------------+----------+----------+----------+----------+
| Interest expense and finance charges | - | 224 | - | - |
+----------------------------------------+----------+----------+----------+----------+
| Impairment of goodwill | - | 130 | - | - |
+----------------------------------------+----------+----------+----------+----------+
| Depreciation and amortisation of | - | 13 | - | - |
| intangible assets | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Depreciation | - | 3,535 | - | - |
+----------------------------------------+----------+----------+----------+----------+
| Loss on disposal | - | 15,854 | - | - |
+----------------------------------------+----------+----------+----------+----------+
| Profit on Allied receivership and | - | (200) | - | - |
| Megabowl administration | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Changes in working capital: | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Increase in inventories | - | (173) | - | - |
+----------------------------------------+----------+----------+----------+----------+
| Decrease in trade and other | - | 407 | - | - |
| receivables | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Increase in payables | - | 89 | - | - |
+----------------------------------------+----------+----------+----------+----------+
| Decrease in provisions | - | (53) | - | - |
+----------------------------------------+----------+----------+----------+----------+
| Cash generated from discontinued | - | 6,145 | - | - |
| operations | | | | |
+----------------------------------------+----------+----------+----------+----------+
| Cash generated from/ (used in) | 3,505 | 12,372 | (3,549) | (5,449) |
| operations | | | | |
+----------------------------------------+----------+----------+----------+----------+
* Increase/(decrease) in payables and proceeds from sale of property, plant and
equipment for the 52 weeks to 30th December 2007 have been restated to show
GBP1.75m of deferred consideration due on the sale and leaseback of Stockport
bowl as a movement in working capital and not as sale proceeds.
24 Financial liabilities
+--------------------------------+--------------+------------+--------------+-------------+
| Current liabilities | Group | Group | Company | Company |
+--------------------------------+--------------+------------+--------------+-------------+
| | 28th | 30th | 28th | 30th |
| | December | December | December | December |
| | 2008 | 2007 | 2008 | 2007 |
+--------------------------------+--------------+------------+--------------+-------------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------------+--------------+------------+--------------+-------------+
| Bank overdrafts | - | 545 | 1,488 | 938 |
+--------------------------------+--------------+------------+--------------+-------------+
| Bank loans | 3,679 | 4,313 | - | (487) |
+--------------------------------+--------------+------------+--------------+-------------+
| Finance leases | 71 | 71 | - | - |
+--------------------------------+--------------+------------+--------------+-------------+
| Other | - | 103 | - | 71 |
+--------------------------------+--------------+------------+--------------+-------------+
| | 3,750 | 5,032 | 1,488 | 522 |
+--------------------------------+--------------+------------+--------------+-------------+
Bank loans due within one year are shown net of deferred financing costs of
GBP58,000 (2007: GBP487,000). The debt was originally arranged and drawn by
Georgica, and the costs were incurred by Georgica. In 2007 these deferred
financing costs were held in the company balance sheet and were charged to the
income statement in April 2008 when the financing agreement was rearranged.
+--------------------------------+-------------+-------------+-------------+-------------+
| Non-current liabilities | Group | Group | Company | Company |
+--------------------------------+-------------+-------------+-------------+-------------+
| | 28th | 30th | 28th | 30th |
| | December | December | December | December |
| | 2008 | 2007 | 2008 | 2007 |
+--------------------------------+-------------+-------------+-------------+-------------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------------+-------------+-------------+-------------+-------------+
| Bank loans | 2,437 | - | - | - |
+--------------------------------+-------------+-------------+-------------+-------------+
| Finance leases | 2,721 | 2,791 | - | - |
+--------------------------------+-------------+-------------+-------------+-------------+
| | 5,158 | 2,791 | - | - |
+--------------------------------+-------------+-------------+-------------+-------------+
Bank loans due after more than one year are shown net of GBP188,000 (2007:
GBPnil) of deferred financing costs.
The bank loans and overdrafts are secured by fixed and floating charges on all
of the group's properties and assets. The directors have reviewed all loans and
borrowings and have concluded that the terms of the agreements are on a
commercial basis. The carrying value represents fair value to the group for all
non-current borrowings.
+--------------------------------+-------------+-------------+-------------+-------------+
| Borrowings are repayable as | | | | |
| follows: | | | | |
+--------------------------------+-------------+-------------+-------------+-------------+
| | Group | Group | Company | Company |
+--------------------------------+-------------+-------------+-------------+-------------+
| | 28th | 30th | 28th | 30th |
| | December | December | December | December |
| | 2008 | 2007 | 2008 | 2007 |
+--------------------------------+-------------+-------------+-------------+-------------+
| Bank loans | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------------+-------------+-------------+-------------+-------------+
| Between one and two years | 750 | - | - | - |
+--------------------------------+-------------+-------------+-------------+-------------+
| Between two and five years | 1,875 | - | - | - |
+--------------------------------+-------------+-------------+-------------+-------------+
| After five years | - | - | - | - |
+--------------------------------+-------------+-------------+-------------+-------------+
| | 2,625 | - | - | - |
+--------------------------------+-------------+-------------+-------------+-------------+
| Within one year | 3,737 | 4,800 | - | - |
+--------------------------------+-------------+-------------+-------------+-------------+
| | 6,362 | 4,800 | - | - |
+--------------------------------+-------------+-------------+-------------+-------------+
The group had GBP6,638,000 (2007:GBPnil) of undrawn capex facilities and GBPnil
(2007:GBPnil) of undrawn revolving facilities at 28th December 2008. The group
had cash on deposit of GBP46,000 (2007: GBP188,000).
Finance lease liabilities - Group
The payment profile of minimum lease payments under finance leases is as
follows:
+-----------------------------+-+--+-------------+-------------+-------------+-------------+
| | | | Net | Gross |
+-----------------------------+-+--+---------------------------+---------------------------+
| | | | 28th | 30th | 28th | 30th |
| | | | December | December | December | December |
| | | | 2008 | 2007 | 2008 | 2007 |
+-----------------------------+-+--+-------------+-------------+-------------+-------------+
| | | | GBP000 | GBP000 | GBP000 | GBP000 |
+-----------------------------+-+--+-------------+-------------+-------------+-------------+
| Within one year | | | 71 | 71 | 352 | 352 |
+-----------------------------+-+--+-------------+-------------+-------------+-------------+
| Between one and five years | | | 365 | 365 | 1,408 | 1,408 |
+-----------------------------+-+--+-------------+-------------+-------------+-------------+
| After five years | | | 2,356 | 2,426 | 4,122 | 4,460 |
+-----------------------------+-+--+-------------+-------------+-------------+-------------+
| | | | 2,792 | 2,862 | 5,882 | 6,220 |
+-----------------------------+-+--+-------------+-------------+-------------+-------------+
| Future finance charges on | | | - | - | (3,090) | (3,358) |
| finance leases | | | | | | |
+-----------------------------+-+--+-------------+-------------+-------------+-------------+
| Present value of finance | | | 2,792 | 2,862 | 2,792 | 2,862 |
| lease liabilities | | | | | | |
+-----------------------------+-+--+-------------+-------------+-------------+-------------+
25 Trade and other payables and other non-current liabilities
+--------------------------------+-------------+-------------+-------------+-------------+
| | Group | Group | Company | Company |
+--------------------------------+-------------+-------------+-------------+-------------+
| Trade and other payables | 28th | 30th | 28th | 30th |
| | December | December | December | December |
| | 2008 | 2007 | 2008 | 2007 |
+--------------------------------+-------------+-------------+-------------+-------------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------------+-------------+-------------+-------------+-------------+
| Trade payables | 2,488 | 2,375 | - | - |
+--------------------------------+-------------+-------------+-------------+-------------+
| Amounts due to subsidiary | - | - | 65,879 | 73,687 |
| undertakings | | | | |
+--------------------------------+-------------+-------------+-------------+-------------+
| Social security and other | 943 | 913 | 34 | - |
| taxes | | | | |
+--------------------------------+-------------+-------------+-------------+-------------+
| Other payables | 3,590 | 4,800 | 9 | 89 |
+--------------------------------+-------------+-------------+-------------+-------------+
| Accruals | 2,261 | 2,284 | 254 | 1,436 |
+--------------------------------+-------------+-------------+-------------+-------------+
| Deferred income - lease | 103 | 65 | - | - |
| incentives | | | | |
+--------------------------------+-------------+-------------+-------------+-------------+
| | 9,385 | 10,437 | 66,176 | 75,212 |
+--------------------------------+-------------+-------------+-------------+-------------+
Amounts due to subsidiary undertakings are loaned at the group's average
borrowing rate, being commercial loans repayable on demand.
+------------------------------------------+-----------------+-----------------+-----------------+-----------------+
| | Group | Group | Company | Company |
+------------------------------------------+-----------------+-----------------+-----------------+-----------------+
| Other non-current liabilities | 28th December | 30th December | 28th December | 30th December |
| | 2008 | 2007 | 2008 | 2007 |
+------------------------------------------+-----------------+-----------------+-----------------+-----------------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+------------------------------------------+-----------------+-----------------+-----------------+-----------------+
| Cash-settled share based payment accrual | - | 20 | - | 20 |
+------------------------------------------+-----------------+-----------------+-----------------+-----------------+
| Deferred income - lease incentives | 1,148 | 1,324 | - | - |
+------------------------------------------+-----------------+-----------------+-----------------+-----------------+
| | 1,148 | 1,344 | - | 20 |
+------------------------------------------+-----------------+-----------------+-----------------+-----------------+
26 Provisions
+----------------------------------------------------+-------------+-------------+
| | Group | Company |
+----------------------------------------------------+-------------+-------------+
| Onerous lease provisions | GBP000 | GBP000 |
+----------------------------------------------------+-------------+-------------+
| At 1st January 2007 | 746 | 44 |
+----------------------------------------------------+-------------+-------------+
| Provided in the period | 1,090 | - |
+----------------------------------------------------+-------------+-------------+
| Utilised in the period | (189) | (44) |
+----------------------------------------------------+-------------+-------------+
| Released on disposal of Rileys | (525) | - |
+----------------------------------------------------+-------------+-------------+
| Notional interest on unwinding of discount | 60 | - |
+----------------------------------------------------+-------------+-------------+
| At 30th December 2007 - current | 148 | - |
+----------------------------------------------------+-------------+-------------+
| At 30th December 2007 - non-current | 1,034 | - |
+----------------------------------------------------+-------------+-------------+
| Provided in the period | 6,969 | - |
+----------------------------------------------------+-------------+-------------+
| Utilised in the period | (250) | - |
+----------------------------------------------------+-------------+-------------+
| Notional interest on unwinding of discount | 117 | - |
+----------------------------------------------------+-------------+-------------+
| At 28th December 2008 - current | 696 | - |
+----------------------------------------------------+-------------+-------------+
| At 28th December 2008 - non-current | 7,322 | - |
+----------------------------------------------------+-------------+-------------+
26 Provisions (continued)
The provision for onerous contracts comprises provision for the onerous element
of the property leases on certain trading units, covering the expected period of
the onerous commitment. The assumptions underlying the onerous lease provisions
are consistent with the assumptions used for impairment (see note 11).
The provision is expected to unwind as follows:
+--------------------------------+-------------+-------------+---------+----------+
| | | | | Total |
+--------------------------------+-------------+-------------+---------+----------+
| Onerous lease provisions | | | | GBP000 |
+--------------------------------+-------------+-------------+---------+----------+
| Between one and two years | | | | 696 |
+--------------------------------+-------------+-------------+---------+----------+
| Between two and five years | | | | 2,087 |
+--------------------------------+-------------+-------------+---------+----------+
| After five years | | | | 4,539 |
+--------------------------------+-------------+-------------+---------+----------+
| | | | | 7,322 |
+--------------------------------+-------------+-------------+---------+----------+
| Within one year | | | | 696 |
+--------------------------------+-------------+-------------+---------+----------+
| | | | | 8,018 |
+--------------------------------+-------------+-------------+---------+----------+
27 Deferred tax
The company has no deferred tax asset or liability.
Group:
Deferred tax assets and liabilities are attributable to the following:
+---------------------+----------+----------+----------+----------+----------+----------+
| | Assets | Liabilities | Net |
+---------------------+---------------------+---------------------+---------------------+
| | 28th | 30th | 28th | 30th | 28th | 30th |
| |December |December |December |December |December |December |
| | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 |
+---------------------+----------+----------+----------+----------+----------+----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+---------------------+----------+----------+----------+----------+----------+----------+
| | | | | | | |
+---------------------+----------+----------+----------+----------+----------+----------+
| Property, plant and | - | - | (2,748) | (5,096) | (2,748) | (5,096) |
| equipment | | | | | | |
+---------------------+----------+----------+----------+----------+----------+----------+
| Tax losses | 6,924 | 5,176 | - | - | 6,924 | 5,176 |
+---------------------+----------+----------+----------+----------+----------+----------+
| Other | - | - | (792) | (2,073) | (792) | (2,073) |
+---------------------+----------+----------+----------+----------+----------+----------+
| Total | 6,924 | 5,176 | (3,540) | (7,169) | 3,384 | (1,993) |
+---------------------+----------+----------+----------+----------+----------+----------+
Of the total deferred tax asset of GBP3.4m at 28th December 2008, GBP1.0m is
expected to be utilised in 2009 and so represents the current portion of the
asset. A 1% change in the corporation tax rate would cause a GBP121,000 change
in the value of the deferred tax asset.
Movement in deferred tax during the 52 week period ended 28th December 2008:
+-------------------------------+---------------+------------+------------+------------+
| | 31st December | Recognised | Recognised | 28th |
| | 2007 | in income | in equity | December |
| | | statement | | 2008 |
+-------------------------------+---------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+-------------------------------+---------------+------------+------------+------------+
| | | | | |
+-------------------------------+---------------+------------+------------+------------+
| Property, plant and equipment | (5,096) | 2,348 | - | (2,748) |
+-------------------------------+---------------+------------+------------+------------+
| Tax losses | 5,176 | 1,748 | - | 6,924 |
+-------------------------------+---------------+------------+------------+------------+
| Other | (2,073) | 1,281 | - | (792) |
+-------------------------------+---------------+------------+------------+------------+
| Total | (1,993) | 5,377 | - | 3,384 |
+-------------------------------+---------------+------------+------------+------------+
Movement in deferred tax during the 52 week period ended 30th December 2007:
+-------------------------------+------------------+------------+------------+--------------------+
| | 1st January 2007 | Recognised | Recognised | 30th December 2007 |
| | | in income | in equity | |
| | | statement | | |
+-------------------------------+------------------+------------+------------+--------------------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+-------------------------------+------------------+------------+------------+--------------------+
| | | | | |
+-------------------------------+------------------+------------+------------+--------------------+
| Property, plant and equipment | (13,807) | 8,711 | - | (5,096) |
+-------------------------------+------------------+------------+------------+--------------------+
| Tax losses | 5,925 | (749) | - | 5,176 |
+-------------------------------+------------------+------------+------------+--------------------+
| Other | (895) | (1,178) | - | (2,073) |
+-------------------------------+------------------+------------+------------+--------------------+
| Total | (8,777) | 6,784 | - | (1,993) |
+-------------------------------+------------------+------------+------------+--------------------+
The group has carry forward tax losses of an estimated GBP25.1m (2007:GBP18.6m).
Of these, GBP24.7m are held by Tenpin Limited and GBP0.4m are held by Georgica
Holdings Limited. All of the Tenpin Limited losses have been included in the
deferred tax assets set out above, as management believe that it is highly
probable that Tenpin's business will make profits sufficient to utilise these
losses in the foreseeable future. The GBP0.4m of Georgica Holdings Limited
losses have not been recognised. The potential deferred tax asset on these
losses is the only unprovided deferred tax.
28 Financial instruments
The group's principal financial instruments comprise bank loans, an interest
rate cap, cash and short-term deposits and are held in sterling. The purpose of
these financial instruments is to provide finance for the group's operations.
The group has various other financial instruments such as trade receivables and
trade payables that arise directly from its operations. All the group's
financial instruments are denominated in GBP sterling. The carrying value of all
the group's financial instruments approximates fair value and they are
classified as loans and receivables, except the group's interest rate cap which
is carried at fair value through the income statement reassessed at each
reporting date on a mark to market basis.
Financial risk management:
Cash flow and fair value interest rate risk
The group borrows in sterling at floating rates of interest and has entered into
an interest rate cap for the interest rate of its financial liabilities. After
taking account of this instrument the interest rate profile of the group's
financial liabilities, gross of debt issue costs, was as follows:
+---------------------------------------------------+----------------+----------------+
| Interest rate risk profile of financial | 28th December | 30th December |
| liabilities | 2008 | 2007 |
+---------------------------------------------------+----------------+----------------+
| | GBP000 | GBP000 |
+---------------------------------------------------+----------------+----------------+
| Fixed rate financial liabilities | - | 5,345 |
+---------------------------------------------------+----------------+----------------+
| Floating rate financial liabilities | 6,362 | - |
+---------------------------------------------------+----------------+----------------+
| Finance leases | 2,792 | 2,862 |
+---------------------------------------------------+----------------+----------------+
| Financial liabilities on which no interest is | 8,018 | 1,182 |
| paid | | |
+---------------------------------------------------+----------------+----------------+
| | 17,172 | 9,389 |
+---------------------------------------------------+----------------+----------------+
From 31st December 2007 to 4th July 2008 GBP100m of the group's floating rate
interest risk was capped at 6%. On 4th July 2008 GBP85m in value of the cap was
sold for cash proceeds of GBP510,000, leaving an interest rate cap in place of
GBP15m which is in place until April 2010. The group has no fair value interest
rate risk.
Cash flow interest rate risk derives from the group's floating rate financial
liabilities, being its bank debt and overdraft facility, which are both linked
to LIBOR plus a margin of 1.5%.
The weighted average period to maturity of the interest-free financial
liabilities, being onerous lease provisions, is 6 years (2007: 10 years).
Sensitivity analysis: In managing interest rate risk the group aims to reduce
the impact of short-term fluctuations on the group's earnings. Over the
longer-term, however, sustained changes in interest rates would have an impact
on consolidated earnings. It is estimated that a general increase of one
percentage point in interest rates would decrease the group's profit before tax
by less than GBP0.1m (2007: less than GBP0.1m). The interest rate cap has been
included in this calculation.
Credit risk
As almost all of the group's sales are for cash, the group is exposed to minimal
credit risk.
Liquidity risk
The group's cash position and cash flow forecasts are reviewed by management on
a daily basis. The GBP13m bank debt facility and GBP2m overdraft facility are
available to 11th April 2013 subject to a repayment profile. The debt drawn
under the facility agreement at 28th December 2008, and the undrawn facilities
are due to be repaid as follows:
+--------------------------+------------+------------+------------+------------+------------+
| | 2009 | 2010 | 2011 | 2012 | 2013 |
+--------------------------+------------+------------+------------+------------+------------+
| Drawn debt repayment | 3,737,000 | 750,000 | 750,000 | 750,000 | 375,000 |
| profile | | | | | |
+--------------------------+------------+------------+------------+------------+------------+
| Undrawn debt repayment | 513,000 | 1,750,000 | 1,750,000 | 1,750,000 | 875,000 |
| profile | | | | | |
+--------------------------+------------+------------+------------+------------+------------+
The GBP3m revolving debt, which is fully drawn at 28th December 2008 and is due
for repayment within one year may be redrawn and is available until the facility
agreement terminates in April 2013.
Currency risk
The group has no material exposure to currency risk.
29 Capital commitments
Neither the company nor the group had any capital commitments which were
contracted for but not provided for at 28th December 2008 or at 30th December
2007.
30 Operating leases
The future aggregate minimum lease payments under non-cancellable operating
leases are as follows:
+----------------------------------------------------------+-------------+------------+
| Leases expiring: | 28th | 30th |
| | December | December |
| | 2008 | 2007 |
+----------------------------------------------------------+-------------+------------+
| | GBP000 | GBP000 |
+----------------------------------------------------------+-------------+------------+
| Group | | |
+----------------------------------------------------------+-------------+------------+
| | | |
+----------------------------------------------------------+-------------+------------+
| Within one year | 10,042 | 9,454 |
+----------------------------------------------------------+-------------+------------+
| Between one and five years | 41,973 | 40,235 |
+----------------------------------------------------------+-------------+------------+
| After five years | 94,231 | 102,113 |
+----------------------------------------------------------+-------------+------------+
| | 146,246 | 151,802 |
+----------------------------------------------------------+-------------+------------+
| Company | | |
+----------------------------------------------------------+-------------+------------+
| | | |
+----------------------------------------------------------+-------------+------------+
| Within one year | 252 | 273 |
+----------------------------------------------------------+-------------+------------+
| Between one and five years | 980 | 986 |
+----------------------------------------------------------+-------------+------------+
| After five years | 2,572 | 2,818 |
+----------------------------------------------------------+-------------+------------+
| | 3,804 | 4,077 |
+----------------------------------------------------------+-------------+------------+
Tenpin has 34 (2007: 33) bowling venues held on operating leases, all with less
than 25 years to run. Of these, one (2007: three) of the leases is subject to
landlord breaks on very short notice with no compensation. The majority of the
leases are in England and Wales, and the provision of the Landlord and Tenants
Act giving the tenant the right to extend the lease by 15 years on
expiry applies in most cases.
During 2008 Tenpin sold and leased back one (2007: 9) of its freehold and long
leasehold properties. The lease backs are for 20 years (one at 25 years) at
market rents, with 5 yearly rent reviews, and account for GBP61m (2007: GBP57m)
of the commitment.
31 Contingent liabilities
The company is contingently liable as a guarantor under the terms of the group's
bank loan agreements for the borrowings under this agreement by each group
company. The directors do not expect this to have any material effect.
32 Related party transactions
The company sub-lets part of its London office to Aida Capital Limited, a
company in which Nicholas Oppenheim has a significant interest. In 2008, rent
and other service costs of GBP242,430 (2007: GBP209,500) including GBP62,503
(2007: GBPnil) for the services of Peter Haspel, Georgica managing director,
were recharged to this company or its affiliates, all of which was invoiced.
During 2008 Georgica PLC received intercompany funding payments of GBP3.0m and
disposal proceeds of GBP1.4m from Tenpin Limited and received disposal proceeds
of GBP2.2m from Georgica Holdings Limited. Georgica PLC also repaid GBP3.6m of
intercompany debt to Tenpin Limited, and received liquidation dividends of
GBP10.0m from Tenpin Finance Limited and GBP4.5m from Tenpin Group Limited
releasing the company from its intercompany debts to those companies. The
intercompany payable of GBP4.6m to Georgica Franchises Limited was received by
Georgica Holdings Limited, its parent company, as a liquidation dividend during
2008 and so is now owed to Georgica Holdings Limited. During 2007 Georgica PLC
received dividends of GBP63.1m from Georgica Holdings Limited, GBP50.5m from
Tenpin Finance Limited, GBP13.0m from Tenpin Limited and GBP12.2m from Tenpin
Group Limited. It also received intercompany funding payments of GBP1.0m from
Rileys Limited and GBP3.5m from Tenpin Limited. It transferred capex funding of
GBP3.7m to Rileys Limited and GBP0.5m to Tenpin Limited and received GBP49.3m of
disposal proceeds from Tenpin Limited and GBP0.4m from Rileys Limited.
The company accrued interest of GBP4.4m on its intercompany loans in the period
(2007: GBP7.4m) and had outstanding intercompany balances at 28th December 2008
of GBP6.2m payable to Georgica Holdings Limited and GBP59.6m payable to Tenpin
Limited (2007: GBP0.5m receivable from Georgica Holdings Limited, GBP54.6m
payable to Tenpin Limited, GBP10.0m payable to Tenpin Finance Limited, GBP4.6m
payable to Georgica Franchises Limited and GBP4.5m payable to Tenpin Group
Limited).
The sale of Rileys Limited in 2007 (see note 8) was to a company 50% owned by
Georgica PLC's largest shareholder, North Atlantic Value LLP. Whilst the
directors do not consider that this was a related party transaction at the time
of the transaction, North Atlantic Value LLP now holds 27.77% (2007: 24.94%) of
the company's shares and is a related party.
Fees paid to non-executive directors in respect of services provided to the
company are disclosed in the remuneration report. The company is listed on the
Alternative Investment Market, and no individual investor holds more than 30% of
the company's shares or has more than 30% voting control. Accordingly, the
directors do not believe that there is an ultimate controlling party.
Operating review
Overview
Georgica is the holding company for the tenpin bowling operations of Tenpin
Limited and a portfolio of 6 properties held for sale for redevelopment and
currently occupied by Rileys. Formerly it was also the holding company for the
cue sports operations of Rileys Limited, which were sold on 28th August 2007.
Tenpin is the largest tenpin bowling operator in the UK with an approximate 20%
share of the UK market.
Results of operations -continuing activities
Tenpin:
The table below sets out Tenpin's performance for the 52 week period to
28th December 2008, compared with the 52 week period to 30th December 2007.
+-----------------------------+--------------+----------+--------------+--------------+
| | | Tenpin (Tenpin bowling |
| | | division) |
+-----------------------------+-------------------------+-----------------------------+
| | | | Unaudited | Unaudited |
| | | | 52 weeks | 52 weeks |
| | | | to 28th | to 30th |
| | | | December | December |
| | | | 2008 | 2007 |
+-----------------------------+--------------+----------+--------------+--------------+
| | | | GBPm | GBPm |
+-----------------------------+--------------+----------+--------------+--------------+
| | | | | |
+-----------------------------+--------------+----------+--------------+--------------+
| Turnover | | | 62.8 | 65.7 |
+-----------------------------+--------------+----------+--------------+--------------+
| Cost of sales | | | (25.9) | (26.8) |
+-----------------------------+--------------+----------+--------------+--------------+
| Operating costs | | | (16.5) | (16.5) |
+-----------------------------+--------------+----------+--------------+--------------+
| Rent | | | (10.4) | (8.2) |
+-----------------------------+--------------+----------+--------------+--------------+
| | | | | |
+-----------------------------+--------------+----------+--------------+--------------+
| Contribution | | | 10.0 | 14.2 |
+-----------------------------+--------------+----------+--------------+--------------+
| Overheads | | | (3.4) | (3.5) |
+-----------------------------+--------------+----------+--------------+--------------+
| | | | | |
+-----------------------------+--------------+----------+--------------+--------------+
| EBITDA | | | 6.6 | 10.7 |
+-----------------------------+--------------+----------+--------------+--------------+
| Non recurring items and | | | (4.9) | 24.8 |
| provisions | | | | |
+-----------------------------+--------------+----------+--------------+--------------+
| Depreciation and impairment | | | (43.4) | (7.3) |
+-----------------------------+--------------+----------+--------------+--------------+
| | | | | |
+-----------------------------+--------------+----------+--------------+--------------+
| Operating (loss)/profit | | | (41.7) | 28.2 |
+-----------------------------+--------------+----------+--------------+--------------+
| | | | | |
+-----------------------------+--------------+----------+--------------+--------------+
| Gross margin % | | | 85.7% | 85.3% |
+-----------------------------+--------------+----------+--------------+--------------+
| Contribution margin % | | | 15.9% | 21.6% |
+-----------------------------+--------------+----------+--------------+--------------+
| EBITDA margin % | | | 10.5% | 16.3% |
+-----------------------------+--------------+----------+--------------+--------------+
Turnover: Turnover decreased by GBP2.9m (4.4%) from GBP65.7m in the 52 weeks to
30th December 2007 to GBP62.8m in the 52 weeks to 28th December 2008. Sales from
two new build sites opened in 2008 (Wrexham and Sunderland which both opened in
Q4 2008) added GBP0.4m whilst incremental sales from the acquired site at
Grantham (acquired in Q2 2007) and the new build site at Croydon (which opened
in Q4 2007) added GBP1.8m. These incremental sales were more than offset by a
GBP3.2m sales reduction from the disposal for redevelopment of sites at Bristol
(closure Q1 2007), Plympton (closure Q3 2007) and Cardiff (closure Q3 2008) and
the closure of sites at Edinburgh and Gateshead at the end of their leases (both
Q2 2008). There was a GBP1.9m decline in the turnover of the underlying estate,
despite an uplift of GBP2.2m from pricing initiatives.
Contribution: Contribution decreased by GBP4.2m (29.6%) from GBP14.2m in the 52
weeks to 30th December 2007 to GBP10.0m in the 52 weeks to 28th December 2008,
and contribution margin declined by 5.7% points from 21.6% to 15.9%. The sale
and leaseback of nine freehold and long leasehold properties in Q3 2007 and one
in Q2 2008, which generated cash proceeds of over GBP46m, increased the annual
rent charge by GBP2.7m and this was responsible for GBP1.8m of the decline in
contribution against 2007. The new sites opened in 2008 at Wrexham and
Sunderland lost GBP0.2m, including marketing and pre-opening costs, whilst the
new sites opened in 2007 at Grantham and Croydon contributed an incremental
GBP0.4m. Refurbished sites were responsible for a net loss in contribution of
GBP0.2m, from the relaunch costs and disruption during the refurbishment period.
The closed sites reduced contribution by GBP0.4m. Underlying business
contribution (excluding the sale and leaseback rents) fell by GBP2.0m due to
lower contribution from sales (GBP1.6m), higher utility costs (GBP0.2m), higher
marketing costs (0.2m), higher rent (GBP0.1m) and higher other property costs
(GBP0.4m) partially offset by other operating cost savings of GBP0.3m and staff
cost savings of GBP0.2m.
EBITDA: EBITDA decreased by GBP4.1m (38.3%) from GBP10.7m in the 52 weeks to
30th December 2007 to GBP6.6m in the 52 weeks to 28th December 2008, with EBITDA
margin down 5.8% points to 10.5%. This decrease was attributable to the
contribution decrease of GBP4.2m (GBP2.0m of which was due to sale and leaseback
rent) partially offset by a GBP0.1m decrease in overheads.
Operating profit: Operating (loss)/profit decreased by GBP69.9m, from a profit
of GBP28.2m in the 52 weeks to 30th December 2007 to a loss of GBP(41.7)m in the
52 weeks to 28th December 2008. The decrease before depreciation and impairment
was due to the decrease in EBITDA of GBP4.1m, a net reduction in sale and
leaseback gains of GBP25.6m and an increase in onerous lease provisions of
GBP5.8m, partially offset by a net increase in gains on disposal, net of
closures, of GBP1.5m and a reduction in non-recurring costs of GBP0.2m.
Depreciation and impairment charges increased by GBP36.1m from GBP7.3m to
GBP43.4m, comprising an increase in impairment of GBP35.8m, an increase in
depreciation of GBP0.3m from new sites and refurbishments, GBP0.2m from IT
project assets less assets reaching the end of their depreciable lives and a
reduction of GBP0.2m from disposed sites.
Central (Georgica overheads):
EBITDA: The EBITDA loss for the centre decreased by GBP0.1m (6.3%) from GBP1.6m
in the 52 weeks to 30th December 2007 to GBP1.5m in the 52 weeks to 28th
December 2008. The GBP0.1m reduction in EBITDA loss was attributable to
incremental rents received from Rileys in respect of the freehold sites being
marketed for redevelopment by Georgica Holdings and currently occupied by Rileys
clubs as rent was only receivable from August 2007. Overheads remained unchanged
at GBP1.7m as the non-recurrence of a benefit of GBP0.7m in 2007 from the
reversal of charges related to the Georgica Executive Participation Plan was
offset by overhead reductions of GBP0.7m in 2008.
Operating loss: The operating loss reduced by GBP3.2m (62.7%) from GBP5.1m in
the 52 weeks to 30th December 2007 to GBP1.9m in the 52 weeks to 28th December
2008. This was due to the reduction in EBITDA loss of GBP0.1m, together with a
GBP1.3m benefit in 2008 from the sale of two Rileys properties at Pontefract and
Westcliff and a reduction in legal and professional and contractor costs
associated with corporate transactions of GBP2.2m, partially offset by a charge
of GBP0.4m from the revaluation of investment properties.
Property matters:
Tenpin
During 2008 Tenpin opened its new sites in Wrexham (October) and Sunderland
(November). Since July 2005 Tenpin has acquired 4 bowls, opened three new bowls
and has signed agreements to lease a further 3 sites (formerly 4 but the
landlord of a site at Enfield has received planning approval for a change of use
to retail and it will not be developed by Tenpin as a bowl). There is no
intention currently to fit out and open these sites.
One bowl is on a lease of less than 5 years, with regular break clauses on 4
months notice. This bowl currently contributes annual turnover of GBP1.0m and
annual EBITDA of GBP0.2m. Two bowls (in Edinburgh and Gateshead) which were on
similar leases closed during the year (these bowls had combined annual turnover
of GBP3.0m and combined annual EBITDA of GBP0.5m).
The sale and leaseback of Stoke bowl completed in the year for consideration of
GBP3.25m, with an initial annual rent charge of GBP0.3m. This brings the total
proceeds from Tenpin sale and leasebacks completed in 2007 and 2008 to
GBP46.25m, and the combined initial annual rent charge to GBP2.8m. Rileys
completed the sale and leaseback of 44 freehold and long leasehold properties on
28th August 2007 for consideration of GBP28m.
Asset realisation programme
The company has now completed the sale of Tenpin freehold and long leasehold
sites where the redevelopment value exceeds the trading value of the units. Five
bowls, with annual EBITDA of GBP0.55m, were sold for redevelopment for
consideration of GBP21.9m, including Cardiff sold for GBP1.5m in the year.
Georgica Holdings Limited sold two of the 8 Rileys properties that it owns
during the year for GBP2.3m. The remaining 6 properties are actively being
marketed.
Risk factors:
Detailed below are the principal risks and uncertainties which have been
identified by management as facing the Georgica group. Additional risks and
uncertainties which are not currently known or are deemed immaterial may also
have a material impact on the group.
Risks relating to operations:
* Tenpin's bowling business is based exclusively in the UK and so is exposed to UK
economic conditions and consumer confidence. As a leisure activity, bowling may
be affected by the general level of consumer spending on leisure activities and
may also be affected by changing consumer preferences.
* The business is subject to seasonal demand variations. Warm weather adversely
impacts revenues as does unusual weather conditions such as heavy snow, icy
conditions or high winds that discourage people from venturing out. Major
sporting events also affect the results of Tenpin; events such as the football
world cup can adversely affect revenues as supporters visit venues with large
screens dedicated to the sport. School holidays are beneficial for the bowling
business, which is also affected by the timing of bank holidays.
* The group relies on key suppliers for certain requirements of the business. In
the event that a key supplier ceased to trade or was otherwise unable to
continue to supply the group it is possible that an adequate alternative source
of supply may not be identified in the short term, with a consequent adverse
impact on the operation of the business.
* Approximately 21% of the group's turnover is from bar sales, principally of
alcoholic beverages. These sales could be adversely affected by changes in
licensing requirements, or by increased concerns about the effect of alcohol on
health or of drinking and driving.
* The ban on smoking in public places which was implemented in England and Wales
in 2007 may result in a reduction of the number of customers at bowling venues
or the amount of time they spend there, which could impact revenues. Bowl
modification works have been completed where practical to mitigate the impact of
the ban, as far as possible. Other possible regulatory threats to the
profitability of the business include UK or EU employment legislation, such as
minimum wage increases and the working time regulations; competition, consumer
protection and environmental laws; and further implementation of the Disability
Discrimination Act.
* Following the sale or sale and lease back of all of Tenpin's freehold and long
leasehold properties, there is a relatively high rental charge and so a
relatively high fixed cost element to the business which means that financial
performance is relatively sensitive to changes in turnover.
* Tenpin's properties are subject to periodic rent reviews and renegotiation of
rents when leases are renewed; this may have an adverse effect on profits and
rents may increase to the extent that individual businesses become unprofitable.
* A number of UK fiscal factors affect the business such as duty on alcoholic
drinks, VAT and other business and corporation taxes. Changes in legislation
which affect any of these factors could adversely impact the results of the
business.
* The group depends on the continued contribution of key management, and the loss
of a significant member of the management team could adversely affect the
business.
* The business may face increased competition, especially from consolidation in
the bowling sector which might lead to a competitor with greater financial
resources or a more aggressive pricing policy, which could adversely affect
financial performance.
Risks relating to financing:
* The continued availability of the group's senior debt finance is dependent on
continued covenant compliance.
* The ability to continue to roll out the group's capital expenditure programme is
dependent on the availability of cash flow from operations, opportunities at the
right price, and the success of the group in converting them to completed
acquisitions or agreements to lease on acceptable terms.
* Any rise in base lending rates has an adverse impact on financing costs. Five
year record
+---------------------------+----------+----------+----------+----------+----------+----------+
| |52 weeks |52 weeks |52 weeks |53 weeks |53 weeks |52 weeks |
| | to 28th | to 30th | to 31st | to 1st | to 1st | to 26th |
| |December |December |December | January | January |December |
| | 2008 | 2007 | 2006 | 2006 | 2006 | 2004 |
+---------------------------+----------+----------+----------+----------+----------+----------+
| | IFRS | IFRS | IFRS | IFRS | UK GAAP | UK GAAP |
+---------------------------+----------+----------+----------+----------+----------+----------+
| | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm |
+---------------------------+----------+----------+----------+----------+----------+----------+
| | | | | | | |
+---------------------------+----------+----------+----------+----------+----------+----------+
| Sales | 62.8 | 65.7 | 125.6 | 129.0 | 129.0 | 156.0 |
+---------------------------+----------+----------+----------+----------+----------+----------+
| Cost of sales | (25.9) | (26.8) | (56.2) | (56.9) | (56.9) | (72.6) |
+---------------------------+----------+----------+----------+----------+----------+----------+
| Gross profit | 36.9 | 38.9 | 69.4 | 72.1 | 72.1 | 83.4 |
+---------------------------+----------+----------+----------+----------+----------+----------+
| Administrative expenses | (83.9) | (42.1) | (63.8) | (58.8) | (59.9) | (76.9) |
+---------------------------+----------+----------+----------+----------+----------+----------+
| Profit on disposal | 3.4 | 26.3 | 9.1 | 0.2 | 0.3 | 5.8 |
+---------------------------+----------+----------+----------+----------+----------+----------+
| (Loss)/ profit before | (43.6) | 23.1 | 14.7 | 13.5 | 12.5 | 12.3 |
| finance charges | | | | | | |
+---------------------------+----------+----------+----------+----------+----------+----------+
| Finance charges | (0.9) | (15.9) | (10.7) | (11.1) | (10.5) | (8.8) |
+---------------------------+----------+----------+----------+----------+----------+----------+
| (Loss)/ profit before | (44.5) | 7.2 | 4.0 | 2.4 | 2.0 | 3.5 |
| taxation | | | | | | |
+---------------------------+----------+----------+----------+----------+----------+----------+
| Taxation | 5.4 | 1.4 | (2.3) | 5.8 | 2.1 | 0.2 |
+---------------------------+----------+----------+----------+----------+----------+----------+
| Discontinued operations | - | (19.0) | 2.4 | - | - | - |
+---------------------------+----------+----------+----------+----------+----------+----------+
| (Loss)/ profit after | (39.1) | (10.4) | 4.1 | 8.2 | 4.1 | 3.7 |
| taxation | | | | | | |
+---------------------------+----------+----------+----------+----------+----------+----------+
Note: The figures for 2006 have been presented as published in the 2006 annual
report, without the reclassification of Rileys to discontinued operations. The
figures for 2004 have been reclassified in order to conform to the presentation
adopted in the 2005 UK GAAP consolidated income statement.
Capitalisation table
+--------------------------------+-----------+-----------+---------------+-------------+
| | | | As at | As at 30th |
| | | |28th December | December |
| | | | 2008 | 2007 |
+--------------------------------+-----------+-----------+---------------+-------------+
| | | | GBPm | GBPm |
+--------------------------------+-----------+-----------+---------------+-------------+
| Debt (excluding cash and | | | | |
| overdraft): | | | | |
+--------------------------------+-----------+-----------+---------------+-------------+
| Senior term loan facilities | | | 3.4 | 4.8 |
+--------------------------------+-----------+-----------+---------------+-------------+
| Senior revolving credit | | | 3.0 | - |
| facility | | | | |
+--------------------------------+-----------+-----------+---------------+-------------+
| Gross debt (excluding cash and | | | 6.4 | 4.8 |
| overdraft) | | | | |
+--------------------------------+-----------+-----------+---------------+-------------+
| Debt issue costs | | | (0.3) | (0.5) |
+--------------------------------+-----------+-----------+---------------+-------------+
| Net debt (excluding cash and | | | 6.1 | 4.3 |
| overdraft) | | | | |
+--------------------------------+-----------+-----------+---------------+-------------+
| | | | | |
+--------------------------------+-----------+-----------+---------------+-------------+
| Shareholders' funds | | | 40.2 | 79.3 |
+--------------------------------+-----------+-----------+---------------+-------------+
| | | | | |
+--------------------------------+-----------+-----------+---------------+-------------+
| Total capitalisation | | | 46.3 | 83.6 |
+--------------------------------+-----------+-----------+---------------+-------------+
Reconciliation to statutory net debt
+----------------------------------+------+-------------+-------------+-------------+
| Net debt (excluding cash and | | | 6.1 | 4.3 |
| overdraft) | | | | |
+----------------------------------+------+-------------+-------------+-------------+
| Net cash | | | (2.4) | (0.2) |
+----------------------------------+------+-------------+-------------+-------------+
| Statutory net debt | | | 3.7 | 4.1 |
+----------------------------------+------+-------------+-------------+-------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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